[Bored&Stroked]

As I'm not sure what vintage flathead you're running - it may or may not have "soft plugs" in the oil pan rail (in the gasket mounting surface where the pan bolts up). If the engine has them, then you'll see "bulges" on the outside of the block - down at the pan rail. Since you mentioned changing the oil-pan gasket, my guess is that you would seen the soft plugs - if they were there. Did you notice them??? They are about the size of a penny.

The other most common cause (and this one is usually fatal) is if the block froze at one point (water in it, without anti-freeze) and then it caused the pan-rail to crack/split the casting. I've seen countless blocks with this issue - and it makes you sick to find it. Flatheads don't have "soft plugs" like modern engines, so when you freeze them, bad things happen.

If the block froze at one point, this is the most common type of crack. Sometimes these cracks can be fixed, though many of us consider the block as scrap iron when we find them. I will not build an engine that has these cracks - I consider them to be fatal.

It is also possible for a freeze crack to be in other places (like on the outside of the block), but since you mentioned water leaks on both the inside and outside of the pan area - I'm hoping it is a "soft plug" issue and not a freeze crack.

Best of luck!
B&S