Since everyone has been so helpful with my water leak problem, I thought I would update you on my progress. As you know I found that my problem was not the head gasket at all. Rather it was the # 7 and # 1 cylinder sleeves that were leaking around the deck of the block. The reason the machine shops didn't catch it was that steel/rubber seal that they put on top of the block protrudes over the edge of the cylinder wall, thus covering the top edge of the sleeves, where it meets the block. Since this is where the leak occurred, the steel/rubber seal actually sealed this area so no water would pass. It was only after I made a seal that set back from the edge of the cylinder wall, to expose the outside edge of the sleeve, was the leaks found.
After considering my options and a lot of questioning, I decided that removing the sleeves and installing new ones would put too much stress on the block. I had several shops refuse to do the work and suggested that if they were to try, it could affect the other sleeves, thus causing them to leak. You have to consider this when a block has been sleeved in all 8 cylinders.
My only option was to consider a new block or some type of sealer. I have a very limited knowledge of chemistry so I researched all the types of sealers that are made for engine blocks. None of them really seemed like a real fix. I remembered that several years ago I had a tank lined from a company in town. The chemical that was used was a industrial two part epoxy. After a little research I found that it was called Phenol Novolac Epoxy. The properties of this epoxy allow up to 400 degrees and it's strength is remarkable. It is not affected by petroleum product nor alcohols. It is used to coat the inside of industrial tanks and pipe lines. The down fall of the product is that it has a pot life of about 20 minutes. After doing a little doing a little investigation I found a company that sells it under the name of a gas tank sealer. I found a lot of gas tank sealers, but this one is the Phenol Novolac Epoxy that I was looking for!
But sealing a gas tank and sealing a block is two different things. To use the product successfully you have to pour the epoxy inside, then tumble the tank in all different directions to coat the inside surface. This product is very thick much like cold molasses. This posed a problem in that how do you tumble a block? Also since my leak was coming from the top of the sleeve(at the deck), how would the sealer ever get up in that area? I had already determined that the water jacket, around the cylinder was intact, but it must have been cracked, allowing water between the old cylinder wall and the outside of the sleeve. I figured if I could get the sealer to push its way up into the crack and up between the old cylinder wall and the sleeve, the block would be sealed forever. So I decide that I could accomplish this by sealing up the block and adding inside pressure, after the epoxy was poured in. As far as tumbling the engine, I was able to do that on a engine stand. After closing up the block and adding 60psi the epoxy begin to seep out the rim of the sleeve ever so slightly. After 15 minutes I opened the block and allowed the epoxy to drain out of the block before it hardened. I am Glad to say the block is completely sealed and should stay that way.
Currently I assembling the engine and hope to have it up and running in a week. I will let you know how it does under the pressure of real driving. Successful or not it has been a real learning experience