Jim,
Does your 261 have an oil filter? If so, what does it look like and what size are the lines?
What year is your engine? You state it is full-flow. Have you confirmed the casting numbers are for '58-'62 or are you basing this on features of the engine (like the size of the oil filter inlet/outlet holes in the block)?
Answers to the above question are necessary before advice can be given on where to attach the oil pressure line to the block.
If you have an oil filter on a full-flow engine, the oil pressure line can be attached to any of the fittings at the ends of the inlet/outlet lines. Mine was originally on the inlet side but I have converted to a spin-on filter and have placed the oil-pressure line on the outlet side of the filter base.
If you have a '58-'62 261 that has no oil filter, attaching the oil pressure line to the outlet hole (by relacing the plug in the block) must be done with care. You might want to consider attaching a filter unit and you must make an adjustment to a bypass "valve" in the block - this is important. Maybe someone else has better information on this.
Finally, the 1960 Shop Manual has minimal information on oil pressure sender/gauge but there are references to an electrical sender and a mechanical sender. My engine had a mechanical sender and an accessory oil filter (attached as I described above).
Tim
