I had the head checked for flatness by a engine shop and was declared good.
So, I got the new gaskets and decided to get these teflon rings again after discussion with the parts depo in Milwaukee.
Last week I was at the location where the 562 is and started the reassembly. I scrapped the block and went over it with those abrasive scrubbing pads in a drill. I'd gotten a 14x2.0 mm tap and chased all the head bolt holes and blew out the debris. I also ran a die over all the bolts too. I doubt this was done the last time this
was apart. The liner protrusion was hard to check, but as far I could tell it seemed OK.

It was a pain getting this head back in place due to the dirt floor causing my hoist to get stuck as well as a post in the way.

This is a test fit of the new gasket.

These teflon rings are a royal pain to install. The gasket must be totally flat or they pop up and won't stay down between the protuding
flange on the cylinder liner and the metal fire ring on the gasket. They need to be cut to length with a razor as they are too long otherwise.

Note also that there is a "top" and "bottom" to them as they are slightly warped in cross section and if put in upside down are nearly impossible to stay flat to the head deck. They have a groove that notches to the fire ring but not strongly so and they can pop up if that gasket is not totally flat on the head. I spent way too much
time messing with these before I got them in place and could set the head down w/o them possibly not seated and affecting the head to block fit.
After torquing down the bolts in steps I went to check the cold valve gap.

What should the cold gap be? I was getting something like .037" or ~.94mm
The other thing I noted that caused me to pause my reassembly is depending on the crank rotation, there is a HUGE gap on the rocker to value that even allows the pushrod to flop around. The rocker can be teetor-tottered a lot in this position.

As the engine was turned through all the cam positions, the valve gap would be this HUGE amount, or the "normal" gap or pushing the valves open.
I'd had all the pushrods stuck in a pc of cardboard in order so they went back were they came from (as did the headbolts).
Is this normal? I cannot see what I could have done to cause this if not. Seems that all the cylinders do this too.