I solved a similar situation (sbc 350/vintage air) with an extension on the thermostat housing (that I got from Vintage Air). It raises the thermostat, but in doing so provides a side port for your heater hose. the extension can be flipped, and/or rotated, giving you 4 options for pointing that port. Here's a link to their catalog page: http://www.vintageair.com/2012catalo...Page%2074).pdf
They call it a 'water neck riser'.