Allen in NE, please do not read this post. If you had not had your head magnafluxed, do you think you would have experienced problems after you had installed it? What leads you to believe surface cracks will grow and cause problems? These old tractors have a lot more meat in them than modern engines. Surface cracks in combustion chambers are quite common. When I was a kid I tore down my 1950 Chevy. It had visible crackes in every combustion chamber. I put in new rods, rings, and put it back together. It ran fine for several years, until I sold it. I'm sure the combustion chambers were still cracked. I am a registered professional mechanical engineer with significant experience in refinery maintenance and repair. I'm giving you my professional opinion, not idle gossip. While it is really hard to put a cracked head back on an engine, you noted the tractor was running with significant internal problems but "just a little blue smoke". Indeed, these old tractors are just about bullet proof, cracks or not, but they do have a few warts you might have to overlook. I believe a lot of good parts get rejected by modern inspection methods. Even cranks with cracks can be suitable for use in an H or M if you don't hot rod it. It depends on the size of the crack, and where it is. These engines were designed for lower stresses than newer engines. The manufacturing techniques, while not crude, were not as sophisticated as those in use today, and could result in new cracked parts otherwise suitable for service. I'm certain that a lot of new parts right out of the IH factory would not pass today's rigourous inspection techniques used to prove modern parts which will be much more highly stressed. I don't magnaflux old Farmall parts because I don't want to know. Critical parts may get a little PT but if the crack is not visible it is probably not a problem. Of course I don't need the heads you rejected because my heads are all OK :-)
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