Hey David, Thanks for jumping in. I considered the cracked block but have found no evidence of water in the oil. I am going to try advancing the timing and see what happens. If the problem persists then I will pull the right head and have a look-see. I have another block that is in good shape I pulled out of the car that was seized because of a blown head gasket I can swap out. I had it boiled and checked for cracks then put it out in my shed after coating every square inch with grease just in case.
After that there will be no more flathead engine if something happens to it. I will reluctantly pull it and drop in a 350 with 700R4 automatic transmission and call it done. I hate to consider having to do that but I will. As you say there are fewer people who know (I used to build these things in my sleep when I was a kid but have CRS disease after stroke during quadruple by-pass years ago) how to work on them. And of course like you and many other people have pointed out, easier getting parts, less cost involved etc. That 350 Chevy engine are a dime a dozen to find. As a matter of fact I know where two are right now I could have for practically nothing out of a friends garage.