The engine got stupid hot after running for only 10 minutes - so hot, in fact, that the rear bumper was hot to the touch. I shut it down and contemplated the next move...which clearly had to do with figuring out why it was getting so hot. I'd had a frustrating day of just finding more problems so I called it a day.
The next evening, I pulled the right side lower sled tin and the thermostat bracket and thermostat. I manipulated the thermostat flaps linkage with my fingers and discovered that it's only opening about 1/4 of the way. That combined with what might be a burned exhaust valve on #2 means that, at best, the engine tin has to come off. At worst, the heads will have to come off. I then noticed that there was clean oil seeping out of the space between the heads and the cylinders - an area that should be dry - which lead me to wonder about the head studs and or torque rate on them. This is an early case with 10mm head studs and no case savers - torquing the heads down may result in a pulled head stud - something that would require significantly more work than what's currently on the table. After a bit of back and forth, I've decided to start sourcing parts for the replacement engine and transmission. I'm kind of done fucking around with this engine - every time I work on it, something else breaks and it takes weeks to fix it after I've found the parts. I just keep dumping money into it and it fucks up someplace else.
I'm out of town for a few days for work - but I'm going to continue the trek to getting a better built engine and a rebuilt transmission.