I am not an expert, but I did recently finish a 261 build for my '50 3600. I'll give you my .02
I found and installed an "848" head. It required drilling steam holes in it to fit it to the 261 block. I have no idea whether performance was enhanced by using an 848 head, as the engine still has (relatively speaking) very low compression (higher compression pistons are not available, unless you want to pay $$$$ for custom pistons). Someone had already milled my 848 head before when I got it, perhaps as much as .040. With my cam (Langdon "Bulldog" cam), it ended up driving the intake valves very close to the piston (.075 measured clearance, using valve checker springs).
Milling the block or the head is not a great idea IMHO, as you will never get any appreciable increase in compression, and you will have to sink the intake valves further into the head, creating even more problems with valve train geometry. If you run even a mild performance cam, you may find yourself right up against, or beyond the limit for intake valve/piston clearance. The stock 261 cam is an ideal cam for the 261, and it's the same cam (Blue Flame) GM ran in the Corvette 235.
There are no replacement hydraulic lifters for this engine, as far as I know.
The best way to build the 261 is to build it stock with the single carb and stock head and 261 camshaft. It's a great engine, just like that. But easy to make a mess of by attempting to hot rod it. If I had it to do over, I'd have left everything completely stock. The very mild gains in performance were not worth the expense or the hassle, especially with my dual carb setup. The 261 is an old stovebolt engine that performs better than any of the others, even in stock form. If you want more, I'd look at building different engine.
That said, the HEI setup is kinda spiffy, but I need to first put some serious miles on my truck before I am completely sold on the idea of throwing out the old distributor.
Others here have far more experience with this engine, and I am sure they will chime in shortly. Good luck!
Last edited by Norcal Dave; 10/20/2017 6:31 AM.
