Bob, I find that time outs always help when I get frustrated. Often helps me from making a big problem out of a little one.
I'd do some checking before tearing anything apart.
I'd start by retorquing the head bolts. Using the correct tightening sequence, I'd loosen each one by 1/4 turn and then torque to spec. Don't loosen them all at once and then tighten them all at once...do the loosen/tighten procedure one bolt at a time. You might find that the headbolt(s) weren't all torqued correctly.
Then I'd try try a mini-version of a leak-down test. Run compressed air into each spark plug hole when each piston is TDC in the firing cycle and watch for air bubbles in the radiator. If you see bubbles, chances are that you have a bad head gasket, a cracked head/block or a warped head.
If you don't get bubbles, you might have solved the problem by retorquing the head gasket. Or it might have been a fluke that somehow water got introduced into the crankcase during the rebuild. I knew a guy who was hosing dust off a rebuilt engine recently and forgot that he had pulled the fuel pump...Hmmm, wonder who that dummy was!
If you do have bubbles, you might want to simply change out the head gasket. They only cost about $20. You'll be pulling the head anyway, so installing a new head gasket and then rechecking with compressed air will let you know if the problem was the head gasket. If you no longer get bubbles, you are good. If you still have bubbles, time to check for a cracked or warped head.
If all checks out, I'd replace the oil and watch it carefully.
It could be something very simple, so I wouldn't panic. Just check it out one step at a time.
Good luck,
Matt
