Need some opinions on where to go from here...

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One thing I noted from your photos... looks like the block still has the dowel pin on the china wall for the OE intake end gaskets to locate. If that block was decked at some point it's possible the dowel holds the intake too high giving you sealing issues. Most people remove the dowel and make their own end gaskets with a thick 'ol bead of TheRightStuff. Probably not related to your problems but something to consider looking at during your re-assembly...
Yes, good catch. When I assembled the engine on the stand out of the car, there was actually a very small space between that dowel and bottom of the intake rail, so I just left it. The intake actually sealed up really well, front and back and on the gaskets.
My guess, either fuel pump ruptured the diaphram and filled the crankcase with fuel. Not sure how long it has been run, but that scenario kills bearings. Or the carb might be dumping raw fuel out of a booster and washed the rings. Making the marginal ring seal situation very problematic. Are all the valve tip heights equal?
I never even knew this fuel pump issue was a thing, but I will be checking it. I already have a plan for moving forward once the heads are out and engine is in.
Good catch. When I first got these heads, before I did anything with them, I ran a straight edge across the top of the valve tips, and all was well. I will check this again.
 
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I ran an electric pump with a mechanical for years. Was always a concern for me, (increased the chances of it happening) I know someone who spun a rod bearing when a diaphragm failed.
 
If you were leaking that much fuel you could smell it. I didn't see how this would cause the symptoms.
 
The oil smells like fuel a bunch, plus he drained about a quart more volume out of it.
 
Maybe i missed it, but have you tried a carb swap and/or a fuel pump swap to nail down fuel issue?
Yes, I swapped from the 780vac Holley to my dad's 850dp, but didn't run it for long...it was missing still
 
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Spent the day in the shop. Engine and trans are ready to come out, but I need a second pair of hands to get the hood off and unfortunately the wife isn't strong enough to help. Removed fuel pump, looks fine. Also got the heads off- no water in the cylinders or excessive oil, head gaskets look undamaged on the top sides, but strangely cylinder 3 looks like it has had some sort of liquid on top of it (third attached picture, the piston was clean before assembly and if I touch what almost looks like water marksthey smudge), and cylinder 7 (last picture) which was firing has excessive dried up carbon on the piston top that also was not there at reassembly. Engine spins over nice and smooth and I don't notice anything out of the ordinary in any of the cylinders- looks like it did on assembly before putting the heads on...

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Still have no idea why it was missing, no idea what the piston tops in my last post mean, but regardless the engine is coming out and getting torn right down.
 
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If the arrows on the pistons in these pics are correctly identifying the front of the engine, then there is a “ what’s wrong with this picture” scenario going on.

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If the arrows on the pistons in these pics are correctly identifying the front of the engine, then there is a “ what’s wrong with this picture” scenario going on.

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They are indeed pointing to the front. Can you explain what you mean by that? Are the arrows supposed to point to the back of the engine? When I opened up this engine, I marked all the pistons, never took them off of their corresponding rod, cleaned them, then reinstalled them...Unless they are in upside down?
 
The problem I see has nothing to do with the pistons, and may not have anything to do with what you’re chasing down(but would have been a problem had the motor been run for a longer period of time).
I just wanted to make sure I saw what I thought I saw(pistons not in backwards, etc) regarding which end of the pics were the front of the engine.

I wanna see if anyone else catches it, but I’ll give you a hint, the problem is not present on the drivers side.
 
The coolant flow through the whole side of the engine gets severely restricted when the big coolant hole in the deck at the rear is blocked by the gasket.
In addition to that, the big hole in the front is open, allowing the coolant to come from the water pump, and exit the block right there …….back to the head and into crossover in the manifold(without flowing down the length of the block, and then back up the length of the head).

Generally there are safeguards in place on the gasket so it can’t be installed wrong.
On that particular gasket, there appears to be 2 extra dowel holes, that shouldn’t be there.
 
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The coolant flow through that side of the engine gets severely restricted when the big coolant hole in the deck at the rear is blocked by the gasket.
In addition to that, the big hole in the front biz open, allowing the coolant to come from the water pump, and exit the block right there, back to the crossover in the manifold.

Generally there are safeguards in place on the gasket so it can’t be installed wrong.
On that particular gasket, there appears to be 2 extra dowel holes, that shouldn’t be there.
Makes perfect sense.
 
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In the pic of the valve tip height situation……… how much difference is that?

Looks like more than I’d expect from a new set of heads.
Were they bought assembled, or bare?
 
I guess it should be asked, how much running at one time did the engine experience with the one side not getting cooled?

“If it were me”, I’d pull that head apart and make sure there aren’t any exhaust guides tightening up.
 
Use some felpro 8553’s when the heads go back on.
These were the thin MP .028" gaskets. I have a couple of sets from years ago. Thought it would help to get compression up with the stock bottom end.

Engine has about 40-45 minutes of total runtime on it.
 
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