[Michael C Henry]

That little hose, if blocked, can cause big problems. Absolutely no circulation in block. The coolant in the block and heads just gets supper heated . The layer of coolant next to cylinder walls will boil seperating into vapor that will rise to the highest point( the heads and the thermostat).
Will the system usually pull some of the coolant displaced into your overflow tank back into the main system once cooled.
You may want to fill coolant system at the surge tank, start engine and watch for bubbles. If you get bubbles only when engine is running you may have a compression leak into coolant system. You should see fluid start to rise gradually as engine warms and fluid expands.
Once everything is sorted out a thermostat with a small pin hole located at its highest point will help evacuate the trapped air when filling coolant system and will ensure an even (but small) flow past thermostat keeping everything at an even and optimum temperature. If you are using the usual FE intake manifolds as in mid sixties , the thermostat pocket will take the large diameter thermostat. Fords usual thermostat is a large disk with a small valve. Try a Mopar thermostat they fit and are availabel at most parts stores and available in upscale modles that are made so that if they fail they will fail in open position.