Stupid question, but did you check and make sur the block was flat as well when the heads were off?
Update:
Well, our local machine shop here found a crack in the head near an exhaust seat, using a different process of testing than they normally do. They know they dropped the ball on this one and are working with us on the screw-up.
It's a relief to know they found something, now it's time to get it back together.
whs^^^Sucks about the whole ordeal, but glad you found it!!!
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