Originally Posted by fanglemeister
Hey Brian, it's kind of hard to see it well in this picture, but it sort of looks like you have the headgaskets installed backwards with the gasket water passages at the front instead of the back where they belong. Apologies if they were installed correctly, hard to make out in this pic. Just make sure with the new gaskets the end marked "front" is installed at the front!
WRT re-torqueing the head gaskets, just to be clear on this: do not loosen all the bolts 1/4 turn and then retorque them! Loosen one bolt at a time and then retorque it to spec, then go on to the next bolt. :o
Regarding the valves not seating, it sounds like you might have the wrong length pushrod, or else the rockers might not have been adjusted properly (too much lifter preload, when the lifters pump up the valves hang open).
Hang in there, it should be worth the effort once you get it all sorted out. ;)