Something I'm wondering on that block is what the real history of it is. Perhaps the po didn't know or didn't want to tell you in order to make the sale. From the pics you've posted, it's definetly a pre-'58 engine, and the casting date confirms that it's a '54. Since we know the serial number was falsified somewhere along the line, and the casting number does come up as a 235, could it be that the engine was rebuilt/altered somewhere along its life? What I'm getting at, and no offence to anyone, is could it possible that someone overbored the block .187" to make a 261 out of it? I know that is well over twice the max safe overbore for a 235, but it could be possible somebody could have tried it. I personally can find this beleivable, as I have an engine that something very similar was done to by a po to get "more power". In my case, the engine is a Ford 8N tractor 4 cylinder. The guy my Grandpa got it from had taken the sleeves out in order to install larger pistions, he also had the head milled. That didn't work out very well. Grandpa, Uncle Ralph, and my Dad put new sleeve in w/stock pistons, plus a doubled up head gasket, and the engine ran fine after.
I'm just throwing out a theory here, as from what I've seen, 99% of the time the cating number and serial numbers are correct to what the engine is.
