That sucks. Sorry for the bad news.

 

You: "The leak must be a lot worse when it overheats."
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Sorry to hear the bad news, but I strongly suspected what you learned. Naturally, a crack, no matter how minor, behind liner(s) will allow significantly more coolant leakage through crack(s) when engine get hot; reaches normal engine operating temperature. What happens is that the engine heats up, the cracks open up quite a lot more, allowing somewhat larger dia. aluminum cylinder bores, which, in turn, allows cylinder liners to slip, if they are free to slip up/down due to piston friction against interior of liners. A cold engine block that allows only a small stream of coolant leak, after it heats up, coolant pressure builds, the small stream turns into a hose-like forceful constant stream, a significant amount going directly down, into the oil pan. If not tended to immediately, the coolant in oil gets into rod and main bearings, standing in way of lubrication oil, so bearings go to hell fast. Lesser amounts of coolant, working its way upward, past the head gaskets, into the combustion chambers, standing in way of lubricating oils, so piston rings and liners wear rapidly, if not tended to soon after event happens. These are all natural events, resulting from initial engine damage, the cracks behind liners, so resulting further engine damage should come as no great surprise.

 

I know that the problem is what everyone expected. However, from the research I did, it seems like a lot of people just assume what the problem is. I have seen several threads of people doing heads and still having a problem and then figuring out it is a a block, timing gasket, etc. I am just glad I could get to a definitive diagnosis of at least one failure. When I solve the problem with the block I am still going to have to fix the ultimate cause, probably something with the cooling system.

 

My research into this problem, as analyzed by folks with a lot more experience with these motors than me is that the initial porosity of the aluminum casing of the block is a major issue that becomes more prevalent if the motor ever overheats, and is sometimes the root cause of the overheating in the first place.

I would highly recommend that you take your radiator to a well respected radiator shop to have it tested and cleaned.

If it shows signs of being clogged, you are better off to replace it.

Corrected block, new hoses, new water pump, 180 degree thermostat, heads that are checked for flatness and corrected if necessary, replaced throttle body pre-heater and a flushed heater core are all likely on your list of tasks to perform if you want to solve the problem. Along with the installation of an UltraGauge so you can monitor actual engine temps - the stock temp gauge isn't worth a damn...

Even then, you have to continue to be vigilant in monitoring coolant levels and engine temps to ensure that you don't ever allow the motor to overheat.

 

Engine may be worth $.70 cents a pound for scrap

Scrap Metal prices in USA, Midwest, East Coast, West Coast, South West | SCRAP REGISTER

You could pull the crank out and the pistons and sell those.
You could and should sell the heads.

The block ----
scrap.