[brucepick]

OK, it's fessing up time.

I had to abandon using the block heater after a couple weeks due to unexplained air getting into the system. With air in the system, the coolant didn't circulate when heated, and the block only warmed up about 20-30 degrees above ambient.

Today I finally chased it down. I believe its fixed now.
Two hose clamps below the distributor were leaking.

1)
It seems you need to go back over the clamps after a week or two, especially if using new hose. Most (all??) of them needed tightening up.

2)
Two clamps were leaking. I could see the coolant spray on the hose there.

3)
Watch out for skinny worm-gear type hose clamps. They don't take enough tightening to do the job. Use the wider band ones, if you use worm gear type clamps.

4)
Watch out for those clamps you may set up beneath the distributor. You can't see the area easily once its all reassembled. If they leak, you might not see it. Also make sure the clamps don't get in the way of remounting the distributor - I'm assuming you removed it as I did, to assemble the system.