Thanks Matt. I am lucky - I have the housing. I'll give it a try.
Tim - I was told if you could find the thermostat housing you should use it. I do know of guys running a regular housing on a 261 with no problems. Others claim you risk cracking the head. I believe the internet is a source of great information, even a better source of misinformation......Being an engineer I have faith in my predecessor engineers back in the 50's in designing these engines and cooling systems. I will try it.....
Now.......I need a belt pulley to fit on the water pump that Matt directed me to.