318 head gaskets and water jacket holes

Scratch that again. I just stuck a pocket mirror near the backside of the head and the freeze plug is clear missing! No wonder water is pouring out of there.. damn.

That would be a problem fer sure. Use HI Temp red sealant on the front and rear exhaust manifold studs and ALL of the intake bolts, sometime you can get oil seeping up through the intake bolts, if not sealed.