Well, just to confirm:

I had NAPA resurface the head (0.006") was removed.

I used brand new, unused OEM head bolts.

I coated the threads, washers, and bolt heads with oil before torquing them down.

I torqued the head bolts in the order shown in the FSM, in two steps. Step 1 was around 22 lb-ft (don't remember exactly), Step 2 was 61 lb/ft.

Here is the order of torquing that I used:

9 5 1 3 7

8 4 2 6 10

This is off the top of my head. I do not have the FSM in front of me right now. LHT SWEARS that the finish on the head is the problem. I suggested that the block may be warped, but he said that it is unlikely.

Thanks again,