[Joe K]

You seem to all be headed in the right direction.

The oil leak at the rear of the engine would concern me. Generally a new rebuilt engine does not have the "developed faults" that an engine with more miles will have.

As originally and frequently re-done, there is no gasket at the "rear main" - the original design incorporates a "thrower" on the crank and shield/catcher at the outside of the rear main. Some rebuilders modify the crank and remove the thrower and incorporate a split knife-edge seal here. Some people swear by the modification. Others swear at it since there is no going back.

And some competence and plenty of Permatex No. 7 is required around the cork seal at the oil pan. And an even hand in tightening everything up.

As you say, when you go together check to be sure there is a gasket separating the engine from the flywheel housing. You'll recognize it as it has a "swelled out" section which covers the end of the camshaft hole in the block. Without this gasket you can get a leak here which may result in the oil markings you're seeing.

Shimming between the block and the flywheel housing is not difficult, but the housing is "flexible" and you may get inconsistent results with the dial gauge and sweep normally used for this. Keep at it and make it the best you can "on average." Later version flywheel housings tend to be a little stiffer because of the ribs which may be an advantage.

Anyway, good luck. Keep on hand gallon jugs of Fast Orange with the pump top. I prefer the Smooth but will use the Pumice version when that is all that is available.

Joe K