by having this problem, can it be solved by milling the block? can a block be milled with the internals still intact?

 

Yes if warpage is within service limits.

 

thankss for the info. Could it be done with the pistons still in the block?

 

Maybe, but I seriously would never take my block to a place that did.
think about it, they are taking material off the top of your block, I promise they aren't going to do it upside down, which means there would be a very good chance that shavings of aluminum could get in your cyl. and cause serious damage as soon as you start the motor.