Sounds like you have a 261 block and an early 235 cylinder head.
There are much more experienced people that will weigh in soon, but when I was looking for my 261, I ran into a couple that had JB Weld smeared all over the sides of the block in places. I quickly passed. This indicates cracking of the engine block. Is there any history of the engine? Does the owner know anything about previous rebuilds?
The serial number from the block will be the key to identifying your year of 261. These engines could run several different cylinder heads, and you will hear of the "848" head that I believe was offered on the 235 car engine, that raised the compression slightly. A 261 engine has additional coolant passages drilled in the block, and some recommend that these additional 6 holes be drilled into the 848 head if it is to be used on a 261.
I just bought a 261 last weekend so I am learning as well. It will be rebuilt and go in my '53 1/2 ton.
