gmguy,
Which 235 do you have? The low pressure 235s (pre 1953 power glide) had a tube that ran through the water jacket to deliver oil to the rocker arms. These sometimes rust through and cause the milkshake look around the rocker arms. Before tearing the engine apart one could :
1) run a compression test
2) run a pressure test of the cooling system with a radiator pressure tester. Take off the push rod side cover to look for leaks.
3) run a leakdown test on each cylinder. Follow the instructions for your leakdown tester if you have one. Hotrod Lincoln (from the Stovebolters' BB) offers these instructions for a simple leakdown test: "Try doing a cylinder leakdown test by putting compressed air into the cylinder through the spark plug hole with the piston at the top of the compression stroke. The crankshaft is locked by putting the truck [or carr] into high gear and setting the parking brake or using wheel chocks. Listen for piston ring leakage at the oil fill cap, or valve problems at the carburetor or tailpipe. Bubbles in the radiator would indicate a cracked head or a head gasket leak into the cooling system."
