Re: "we've bored 10's of 261's @ 80 over and came out some with paper thin walls and one with a hole in a cylinder"
I can understand that as a matter of principle a shop doesn't want to encourage people to request work that may not come out safe, or buy a block that's already big and waste money.
However, it appears that boring 1/8" was pretty common in those days and most of the failures I read about were after a severe beating.
Perhaps they bored it based on a poorly located centerline from the previous rebuild, so they took too much out of one side?
Didn't notice severe corrosion?
I wouldn't suggest it as anything but the last stage for an otherwise known-to-be-good block (rather than start all over again), but I certainly don't think it never works.
