Update.
I got a call from the machine shop. They magafluxed the block and found a second crack at the very bottom of the bore on the lifter side of the block. It is about one quarter of an inch long. The bottom of the bore on a 235 in this area is not adjacent to the water jacket.
I do not know how far up from this location before you encounter the water jacket.
The manager of the shop won't be back from vacation until Monday. I will follow his advice on whether a sleeve will reliably fix this block, unless someone in here thinks its a no go.
