The 361/407 engines really like to be fully warmed up before putting them under load. If you put a cool engine under full load on the dyno, most of them with the original style head gasket will leak some between the block and head. They seal up when they get to operating temperature.
A new style head gasket may cure your problem with the seepage but running in a lower gear until up to operating temperature may make it less noticeable.
When the head is off it should be checked for straightness but I would not have it surfaced unless it needed it to be trued up. Most of the later diesel engines have a spec that only allows about .010 to be removed from the head surface. That doesn't necessarily mean that it won't work if more is removed, but that is the minimum head thickness that IH published.
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Today's Featured Article - Harvestin Corn in Southern Wisconsin: The Early Years - by Pat Browning. In this area of Wisconsin, most crops are raised to support livestock production or dairy herds in various forms. Corn products were harvested for grain, and for ensilage (we always just called it 'silage'). Silo Filling Time On dairy farms back in the 30's and into the first half of the 40's, making of corn silage was done with horses pulling a corn binder producing tied bundles of fresh, sweet-smelling corn plants, nice green leaves with ear; the
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