Phosphoric acid is commonly used in the auto body trades to remove and convert surface rust. Two products I've used are Henkel #79 Metal Prep and something I like even better is called Rust Mort. I've never used either to clean out a water jacket so can't give advice. Be careful with spilling these as phosphoric acid HATES concrete. Also check to be sure that your machine shop didn't already clean out the block as most good shops won't start work without "boiling out" the block. The process very often leaves the block looking slightly the worse for wear but in fact it's been chemically cleaned. You will still need to drive your gun cleaning kit down into all the oil passages though using agressive solvents. I've used gun cleaning patches to make sure that there is no residue left. Good luck!
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Ron 1801
