Hoyt,
I couldn't tell from the pics if there were captain's bars or not, that's why I wanted to check with you.
As I said before, the captain's bars,casting numbers, and serial numbers are just evidence, not proof, of what the engine really is.
You have open my eyes and I agree that it is just evidence.
Because captain's bars, block casting numbers, and engine serial numbers can be changed, altered or removed.
The factory block casting number 3835911, has always been a 235.
It does appear that your block casting number has been altered.
The 8, 5 ,1 ,1 have been altered to make the casting 3835911.
Your 1954, 261 block casting, could have been 3733950 before it was changed.
Maybe some will post a pic of their 3835911 block casting so we can see what it looks like..