Block and head milling

I'm not familiar with that specific engine, but whenever decks or heads or milled, I ask the shop to do what we call a "skim cut"--that's only the amount needed to insure a flat surface. This process also makes for a good gasket seal too. Any cuts on either the deck (block) or the head will result in a slightly smaller combustion chamber and therefore, a little more compression. I don't know valve/piston clearance on that engine, but if you have any doubts about adequate clearance, this should be checked before running the engine. Usually this is not a problem though, but I wanted to mention it since I haven't built that particular engine before. If that block uses sleeves, you should also confirm how the sleeve height will work if the parts are milled. If so, you may have to take a cut on the sleeves too. The engine shop should be able to tell you that once they get all the parts on hand.

Did you ever consider looking for a 239 cubic inch diesel. 239 was the standard diesel for that tractor. Those 200 cubic inch gas engines weren't much even when new. 504 was the same spread, 153 gas or 188 diesel. The reputation on both these tractors were diesel was great and gas was an excuse. I'm not saying you should do it, rather just think about it. Thing to watch on the 239 diesel is where it came from. IH used that in British and American built tractors but the casting for mounting was a bit different. I think it was also used in some windrowers, and the casting may be different again.