Hi Again,
I put the rebuilt head on today and am getting air comming out of the outside rim of the precomps.  I put new furrels and rings in all locations 8-large and 3 small, new headgasket  and Permatex..  Precomps are tight, injectors are tight.  This D2 has glowplug holes and they are capped with plastic caps.  The caps wont even blow out when I rotate the engine.  When rotating engine you can feel and hear air escaping on the rim of precomp where the oring is located. 
I put on the valve train assembly before turning the engine by the fan blade, noticed the problem and at that time discovered that I could not adjust the valves, they seem too tall.  I then took off the valve train and rotated again and still have the same problem.  Did I get the wrong valves installed?  7F2454 & 7F2455
Does anyone have any ideas?  What am I missing?   Thank You, Gary 
 

Valves are correct for the glow plug head. Was this originally a glow plug block? Early U models used 4F2719 exhaust and 4F5856 intake. Not sure you can interchange.
Compression is getting into the cooling system, What did you have for liner projection?
Valve adjustment or lack of seems like a timing issue.
Only takes one leaking pre-com seat/gasket leaking to charge the cooling system. Are you seeing bubbles at the radiator fill? A pin hole in a liner will do the same thing.

Hi OM,
Yes it is a late model direct start. I put in new liners, a few were slightly high but I pressed them down using the studs and a flat bar. Once I removed the bar they pushed up slightly
probably because of the soap I put on the o rings. but I thought the head gasket would push them down when I tightened the head. I put new copper washers on all liner tops.
I never touched the camshaft. I am wondering if the shop that did the head ground too deep? They looked OK from the bottom of the head. New valves, I didn't check the numbers but shop invoice has correct numbers.
I have not got to point of putting water in it yet, just got the head on. I will check all pre cups tomorrow to make sure they put the copper washers on them. I did pull two off and they looked OK. They used my original pre cups which were in good condition but I will check again in the morning.
Thank You for the help.

Chambers torqued to 150 ft lbs?

I had trouble with a D6 a 318 by not getting the old copper ring out on one or 2 liners. I had used a wire wheel and had all loose stuff off. Did not look like cooper but after changing head gaskets and checked head again, pulled liners and had old cooper rings under the new.

Did the shop resurface the head? and maybe the block? and went to far.

When I removed the old liners the copper rings came out with the liners. I put in new rings and liners.
The head was not resurfaced, I checked to see how flat it was and it was perfect The block was not removed. I did replace crank and rod bearings, pistons and rings.
I checked all precomps this morning and found one that they did not put the copper gasket on !!. They also had the wrong o rings to seal the water jacket.so the jacket was never sealed where I hear the air escaping. They used the top o ring 7F8268 on the bottom where 7F8267 should be, nothing on the top
Without the valve train in place and all valves seated where would the compression escape to? The injectors prevent it from coming out the glow plug hole, correct?
Thanks for the ideas, Going out to "play" for awhile. It is sure fun turning the motor with the fan blades while tensioning the belt with the other hand! I did tighten the belt but it hangs up once in awhile. Gary
I decided to remove the plastic plugs on the glowplug holes and install the glow plugs.  No more leaks and I have compression.  One problem solved.
I reinstalled the valve train mechenism and it seems to be better.  Possibly something was misalined the fIrst time?  am adjusting the valves now.  
I will update later today
Probably all rookie mistakes.

 

Seems you are chasing the possible candidates. Not good leaving out the pre-com copper or steel seat washer. Correct rubber chamber seals are a must. Glow plug passage is open to the combustion chamber below the injector capsule. Once you get past the start up jitters you'll probably be ok.

Looking forward to that day. I hope nothing else comes up. Thanks for the ideas .and explanations.
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