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Loosing two gallons of coolant is alarming.
Are you absolutely sure your timing is correct? Before setting timing did you check that the advancement arm that protrudes through the distributor body travels fully from one side of the opening to the other side when the spark advance lever is moved fully up and then down?

When you set the timing did you have the spark lever all the way up?

Are you using the NuRex wrench to set the timing. If not maybe you should give one a try. Simple to use and gets the timing pretty darn close.

You (us too) need to know for sure what the coolant temperature is. Get a cheap dial or digital meat thermometer and test the coolant temperature directly and check it often. This is the only way you will know for sure what is going on with the coolant temperature.