Is the verdict a cracked block, more info?

[Bud]

Hi, here are the photos of my head gasket and block just as I took the head off. I have not cleaned anything up. I see no problems with the Brumfield head that was on this engine (not photographed). There is major rust, again around the exhaust valves of cylinders 2, 3, and 4. This head gasket was installed last July. I followed all the procedures of torquing in 3 steps up to 60 ft lbs always torquing after it was hot. I had Indian Head shellac between the gasket and block but not between the head and gasket. As you can see the gasket is a copper one, as I recall, a Fel-Pro. The engine was drained of water last November and the cylinders were fogged with oil several times. When I installed the gasket I did a leak-down test and it passed at basically 80 psi in all 4 cylinders. All the steam holes in the block were plugged, but not in the B-F head (just noticed this).
The reason I ran into this was I filled the car with coolant and started up the car and after I did my spring ignition maintenance, then once it was running it blew off a lot of exhaust and vapor out of the exhaust/intake manifold gaskets. I had water in the last 4 ports out of the 6 on the engine, i.e. 3,4,5,& 6 with #1 at the front of the engine.
Do I have a cracked block near the valve seats for cylinders 2, 3, and 4????
I appreciate any and all advice for the next steps to take.
Thanks in advance.