Honestly- doesn't sound good. In all the years I've been doing this- when head gaskets go on those flatheads, it's always been just a compression issue between 2 adjacent cyl's- no big deal.

I would pressurize the cooling system & check if there's any leaks- sounds like you'll probably see coolant go into a cylinder or out the mixer. If that turns out to be the case, cyl head removal will be your next endeavor.