One more suggestion, http://www.permatex.com/products/Au...ermatex_the_Right_Stuff_Gasket_Maker.htm

This stuff will seal anything, much better then the blue you are using now. At least use the black RTV if you choose not to use the Right Stuff above.

We use this to seal head bolts on the 6.5 liter diesels,
http://www.permatex.com/products/Au...ealants/Permatex_Pipe_Joint_Compound.htm
They have the same problem you do, coolant weeps around the threads, fills the head bolt area and slowly seeps out from under the head into the oil.

If you pull out a few head bolts and find them rusty and cruddy, you might be thinking about pulling the head for a clean up. The crude in the holes can stick to the sealant and foul up the threads.

Joe

1937 Chevrolet Inline-powered Streetrod