Warning: OTS (old timer story) alert.
I had a 235 engine that was as you described. I bought the engine ($25) for parts. Many decades of rust in the coolant system seems to settle around the rear cylinder. Even worse, radiator stop leak additives can migrate there as well (like digging in a coal mine). I ended up removing the head to gain access to the other coolant passages being careful not to punch a hole in the cylinder jackets with a cleaning tool. Then I tried different cleaning acids (respirator required) which helped. Once I had clear flowing water out the rear drain plug, I put it all back together and flushed the engine on the stand. More rust comes out. I put the engine on my engine test stand with an adapter to a garden hose and let the water exit onto the ground. I got the engine running at idle. More rust comes out as the engine heated up. Eventually the water started running clear. After all that work, the engine overheated after about 30 minutes. I finally figured out (brain spasm) that this is why the old engine was removed in the first place. The head warped from an overheating block because of the rust buildup restricting coolant flow. I installed a head from another parts engine, and this fixed my overheating problem. It took a month of my labor to get the engine in running condition. What did I get in return? A worn running engine but...it's running now cause, I fixed it. At the time I was young(er), eager to learn by doing it myself and had a limited budget. It was absolutely fun. Today, time is precious. I would strip it all down and have my local engine shop to boil the block/head and check the if the block/head need resurfacing. Go on to the next problem.
I'm going back to my easy chair now. My apologies to the forum.
