Your engine is a bypass system. that means your oil filter is basically "borrowing" about 5-10 psi from the main bearings, which means that you can plug off the filter completely without causing an oiling problem with the rest of the engine.
If you are pressurizing that canister enough to cause it to pop like that, it would seem to me that all of the pumps pressure is being diverted to the filter and not the main bearings. Perhaps you didn't install the main bearings correctly???
Or perhaps one of the oil galleys is plugged.
Another long shot would be that it had been converted to full flow, which means you can't use that canister as it will not allow enough flow without starving the rest of the motor. If this were the case, the block should be tapped for hoses that are much bigger than 1/8" NPT.
Since you have no oil coming out of that tube behind the sidecover, that means no oil is getting to the camshaft either. Which is pointing me back to something being wrong with the bottom end.
The drilled head bolt was a jobber item that was used when replacing a 57 and earlier block, with a 58-62 block, and reusing the 53-57 rocker arms. It is used in conjunction with a plug that forces the oil through the bolt, instead of around it. I have gone over this several times before. Look through earlier posts.
The short story is that if you have a 58-62 block, you need to be using the 58-62 rocker arms with the offset oiling groove. 53-57 blocks don't care what arms are used.
