Yeah, I actually flushed it 3 times. I drove it 25 miles and I still get the mystery bubbles. I always though those bubbles were from the pump like the prop on a boat. I don't have the classical white smoke or the smell of coolant burning. The oil level hasn't dropped. It runs pretty good I guess. I guess I need to have someone do a leak down test. The pressure was a lot more tame than the first time I did it. It seems to only jump a quater pound when I rev it. Crap! I emailed the engine company and I guess its going to be a battle since the won't respond to my emails.

 

I had issues with my cooling system as well after replacing the original 289 with a remanufactured one. I actually went through 2 reman units, couldn't get either one to cool properly. I replaced the radiator, t-stat, pump, hoses, and added a fan shroud but nothing worked. I never had any problems before the reman engine was put in. I finally got fed up and dropped in a mod motor. Hopefully you'll have better luck.

 

You should elevate the front end of the car and start it cold with the cap off and the air pockets should find their way out. I would think that cavitation is possible, but that looks like a lot of big bubbles in there. Like I said I have never looked at mine like you have yours set up, so it may be normal.

 

I forgot to mention, i did add a bottle of napa kool. Its cavitation mojo for diesel engines. I think thats why the pressures werent so crazy like before.
If you think I got bubbles now, you should have seen it before. The mystery bubble are a constant except at idle its only one or two here and there. They never go away even at idle. The have been there since day one.
I understand its an unusual setup and a little hard to relate.