[Ronnieroadster]

Some early Ford engines were built with steel sleeves the idea being when it was time to rebuild the engine all you did was pull the sleeves install new ones and fresh standard size pistons and you were good to go. The sleeves have a small flange on the top that locate in the corresponding grove in the block Looks like your block is one of those blocks. So to seal the leak its really simple what I do is purchase liquid sodium silicate also know as water glass. This is exactly whats used in many block sealers sold in stores however in all these sealing products the sodium silicate is diluted usually with colored water. Using the sodium silicate straight will work perfectly and seal the leak. You can buy a gallon on Ebay for less than the price of most other inferior sealers. Most sealers use the words ceramic in the title or description thats because there selling you a watered down sodium silicate mixture. This sealer sets up in the leak when the water temps reach 140 degrees. I know from experience in the most violent environment {Land Speed Racing} my cracked Flathead Ford blocks remained sealed using the sodium silicate.
Ronnieroadster