1. Sand in the dust cover isn't unusual. You drive in sand all of the time.

2. I never bought a pan gasket without the end pieces. Don't know for sure, but on the intake manifold on the sbc we throw away those pieces and use RTV for a gasket.

3. I would guess this a rocker cover leak. Usually head gaskets leak anti-freeze.

I don't know for sure, but is your 292 set up to where the oil pan has to be pulled to remove the timing cover? If there are two bolt through the front main bearing from the rear, I would reverse these bolts by tapping the bearing housing and put the bolts in from the front. That way you can replace your front seal without dropping the pan.

Fred
52 3600
69 C-10