What is this stuff in my block?

Sediment of any origin will settle where it can, usually at the lowest point.
Previous owner of my 67 had installed a low pressure radiator cap ( 7 lbs. ) and poured a little BarsLeak in the system every year. Reasons being, the radiator had a tiny bit of seepage. When a freeze plug started leaking I found the same thing you found.
I used a long thin screw driver and high pressure garden hose to flush chunks of crap out ( 273 block ). New plugs, a new radiator, new lower hose, and a coolant recovery bottle installed. No related problems since.