63ChevyNova,
For the cost involved, I would use a new head gasket. We always used to spray the head gasket with silver paint..sort of silly. I think the recommended method is DRY..no goop of any kind.
How strange to have machine marks in the block. I think this might be a good sign..maybe it was "decked". I would not worry about the marks made by the tool bit. The gasket will seal many sins. KopperKote was a favorite to put on head gaskets, but I still think the SOP is DRY!
Put the entire engine together before sticking it in the truck. There are some specific attachment points that will balance the engine perfectly...I don't know which bolts they are, but I know someone does.
I think a engine balancer (?) would be a worthwhile thing to use when you install the engine. This allows you to tip and wiggle to your hearts content. If you are going to install the engine without much sheet metal, the task is even easier.
Stuart
