Rich,
Have you verified by measurement that the block is a 235? The bore of the 235 is 3-9/16 (3.5625)" and the bore of the 261 is 3.750" in diameter. I also have a 1954 block with the 3835911 casting number and it is a 261. When I posted tis information a few months ago, some of the 'bolters had trouble believing, but I have verified that it is a true 261, as it has the steam holes, siamesed cylinders, and 261 rods.
What is the serial number stamped into the distributor pad?
Hoyt