Puk'in Fluid

Raising the front of motor would trap more air in front of block as passages to head start between front two cylinders. Seems like close to level would be best to evacuate air from system.
Still not sure if bypass hose is allowing too much water to flow directly to intake which would reduce amount flowing through block & heads. I have never seen a restrictor in any previous builds (SB, B, RB).

In any normal system the coolant will circulate the air out anyway, so it really shouldn't matter.
(also I have NEVER seen one that the bypass caused these problems either)

It could happen that the engine is already hot enough to push coolant out before the thermostat opens though, and this is exactly one of the reasons I drill a 1/8 hole in the thermostat plate before it goes in.
It circulates the air out way before the engine gets hot enough to puke coolant.

He has a compression leak into the cooling system, or a circulation problem.
Simple as that.