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Its not common, but sleeves being cast can have imperfections or porosity which may be your problem here. I would fill the block waterjackets, recheck with the piston@ BDC and seal the cyl at the top with a piece of scrap 1/2" flat plate drilled for the 4 head bolts and an airline fitting. This would eliminate all the other variables like valve seats, head gaskets, etc. The leak may be thru the sleeve then have track around the sleeve to find the area in the original cyl bore that is weak or damaged to escape into the water jacket.
When your finished with it dont throw the plate away, going by the number of similar problems with big bore FE blocks on this forum you may get rich hiring the test plate to others!
Jac Mac
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