I've encountered this problem on two 250's, and the fix can be pretty simple. Bore the block for a 1/8" wall sleeve in the #1 cylinder, and machine the water pump impeller back just enough that there is no interference with the sleeve, in case it rounds out the part of the cylinder where the milling was done. We also did something similar on Ford 2300 OHC 4 cylinder engines when boring them out .110" for 307 Chevy pistons. The front cylinder ended up paper thin where the pump impeller machining was done, so we always sleeved that hole first and bobbed the impeller for clearance.
Jerry

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