I have 1953 and 1950 216s and the tapped hole is for the oil pump pickup that bolts to that cap. The 1950 cap has no dowel hole (don't know about the 1953 as I haven't pulled that off.) You're likely going to have to drill a hole for the dowel on the bearing insert. I plan on installing a 235 crank in the 1953 engine and per Jerry the #3 cap and block have to be machined to narrow them for the later 235 bearings to fit. If you don't have to do that, you're lucky as a local machine shop has guesstimated that work to cost $1000.
I don't know about the oil pickup on a 1954 235, but if it's not needed, you can ignore the hole on top of the cap. It may just be a carryover from the 216's.
