It could still be just rusted pistons or rings -- PB Blaster in the cylinders might be a good releaser. But if you're confident with MMO (I'm not familiar with that), then the next step might be testing to see what part of the engine is being held back.

To know what's locked up, I'd say the next step is to remove the timing belt -- to isolate the possibilities: whether it's something on the crankshaft (e.g., pistons, etc.), camshaft (e.g. stuck valve), or even intermediate shaft (e.g., oil pump, distributor). The latter two might let you turn them (if you're lucky :-) with a socket wrench), much like the former should have, and this will get you closer to the answer.