cracks in block

It really needs to be maged and pressure tested. There can be cracks just about anywhere. Between head studs and water jackets are common. Along the oil pan rails if water was allowed to freeze in the block.
 
If you are serious, take the block to a machine shop which can magnetically find cracks. Cracks emanate from flaws in the casting process which can go undiscovered until the engine is used for years. They don't heal but unfortunately grow when your pocketbook is the emptiest. Fortunately some cracks can be ignored, let's hope for the best.
 
Most common cracks are freeze cracks in northerly climates as was mentioned. They can be anywhere. In warm and extremely hot climates the overheat cracks are more common in the exhaust valve pockets and in the center deck area above the siamese exhaust port there. Most cracks can be seen with the naked eye but not all are in places that can be seen. This is where a pressure test of each bank of the engine is important. If it will hold air under pressure then it will generally hold coolant. Magnaflux will find cracks that are on surface areas that can be seen but won't find cracks inside the block. Some center deck cracks can be run OK but if they extend down into the exhaust port, they won't.
 
Blocks that froze with plain water can crack about an inch above the pan rail, parallel to the rail. Very hard to see, mag particle or dye penetrant testing will show them.
 
Of course do a visual inspection before spending any $$$ at a machine shop. Cracks between the headbolt holes and water passages are known as "part number cracks" (so common that they have a Ford part number) and are usually harmless. Next look for cracks between the cylinder and valve pockets. Inspect in the valley, on the sides above the pan rails and around the main bearing webs. These areas should be inspected closely; you should give the rest of the block a once over.

If the block passes visual inspection, now is the time to take it to the machine shop for further checking. If you find some cracks, all is not lost. Of course, if the cracks are large or there are a lot of them, the block is junk. If you have a few small cracks, you have a decision to make. You can discard the block and try to find another. Or, you can take it to the machine shop to see if it can be repaired. Blocks that were considered junk 20 years ago become builders these days.

This assumes that the machine shop you go to has a good knowledge of flatheads. If you do get to the machine shop stage, the choice of which one to use is critical.
 
At our shop we repair blocks that have cracks shown by our Magnaflux by drilling and pinning the cracks, some that can't be fixed include at the bottom of the cylinder bore outside of the sleeve area. These are commonly caused by freezing. Sometimes old blocks have been dosed with stop leak, and boiling the block may find them. As blocks have become scarce and expensive, many that would have been discarded earlier show up now for rebuilding.
 
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