Huck, I did exactly what your guy said not to do. I had the two bolted tightly together and then tried to fasten them to the block. I, too, am using the rings I checked them out carefully before installing them and they looked fine. There was a lot of varnish in this engine so maybe they aren't seated all the way in.
Could I possibly redo this without taking everything apart again? I was thinking I could undo the bolts holding the intake to the exhaust (or at least loosen them) and then fasten both to the block. Then tighten the two together. I guess at this point, I'd have nothing to lose. If it didn't work, I could just take everything apart.
I did notice that there is a lot of play in the heat riser shaft. The weight looks blackened, too, like it's been getting blown by exhaust. Could sloppy bushings cause this kind of a leak? I see smoke in that area but can't pin it down.