I don't claim to be an expert on 235 rebuilds but I do have alot of experience trouble shooting diesels and except for fuel systems vs carburation, it's the same. Sounds at first as tho you had a head gasket problem or cracked head but you eliminated that problem and the block as well as the source of compression in the coolant. For the sake of not missing the obvious(which in my experience is almost 80-90% the cause of these tricky little conumdrums), the only other sources are the radiator, water pump and heater core. Is it possible the problem is the thermosat? Have you replaced it or checked the old one to see if it's working properly?
