Per Otto: Check the sheave on the balancer and check for a failed bearing in the pump. I have seen the same sheave problem on other engines (Ford) and it's a tough problem to diagnose and often the last thing checked.
My former next door neighbor had a 51 car with a 261 with 5/8 crank and generator pulleys but a 3/8 water pump pulley. He could not be convinced that the application listing for 3/8 belts for that car was wrong. He ended up buying another pump with a pressed on 216 sheave so the 3/8 belt would fit. Not only did it slip in the crank shiv but it threw a fan blade through the hood. Made a nice clean louver. I eventually ended up with that pump after I gave him a 5/8 truck pulley for the factory water pump and convinced him that since it was a truck engine he should go with the truck application listing. This whole process took a couple of years, meanwhile the engine would over heat if he drove it out of the neighborhood. I think it eventually cracked the head from overheating.
