I have the same problem with one of my "high-pressure" 1954 235 truck engines. My assumptions are the same as 55hays - bearings are simply worn out. I have removed the canister oil filter and plugged the oil-return hole in the block and plugged the outlet on the oil-gauge-line T-fitting (with brass pipe plugs).
The oil gauge still works and the oil pressure has increased by about 5 psi (to 5 psi at idle and a little higher at higher speeds). This is only a temporary fix because the oil pressure still decreases to almost zero at low idle when traveling long distances. I drove it over 1,000 last year but it needs to be rebuilt (I'll be temporarily swapping-in a rebuilt 261 by summer 2008).
Tim
