jbcollier, your comments are excellent. If I wasn't such an obsessive compulsive, I would have written this story as the work was being done and saved myself a lot of heart ache. Your comments, if I had them then, would have prevented what happened next.
June 2018
With the new body back on the frame, I was anxious to run the Renault 16 with coolant. I installed the radiator which had been modified to except a modern electric fan, hooked up all of the hoses, double checked the clamps for tightness, and started to fill and bleed the system. I used a premix 50/50 antifreeze. I Bled the rad and the water pump and kept filling the swirl tank. There were a few gurgles and bubbles which I expect was normal. So I went in for dinner and left the cooling system to digest all the liquid that had been introduced.
Upon my return I found that the level in the swirl tank had gone down considerably. So... I topped it up. I had a few other things to do around the shop so I checked back with it in a couple of minutes and found that the level had gone down a little.
Being a bit concerned, I topped it up again and went to bed.
The next morning the level had dropped to where the swirl tank was almost empty. the level was about the same as the height of the water pump. So... there has to be a leak. I looked under the car, around the rad, the heater, and felt around the carpeting which had just begun to be installed. All dry. Any logical person knows it didn't evaporate and it had to go somewhere. There was only one other place to look.
Upon pulling the dip stick I had my answer. The worst answer. The coolant had found its way to the oil pan. I didn't know if it was the paper seal at the bottom of one of the cylinders or a head gasket leak. The previous test runs of the engine did have a minor oil leak between the head and the block which stopped with a quick re-torque. I had good compression.
So I ordered a new head gasket. While the head was off and the oil pan drained. I poured some water around the cylinder sleeves and left it over night. The next day the level hadn't changed. So I logically concluded that the head gasket was bad or installed badly. The new gasket was installed. I was very careful to meticulously clean every surface. Torqued the head, installed and set the rockers, and installed a brand new water pump just to be safe.
To shorten this story, please reread the last 3 paragraphs. Yes. Exactly the same thing happened. Water migrated directly to the pan.
The conclusion is, jbcollier is right. A proper experienced person should rebuild a motor. I am now sure that the critical cylinder sleeve height was not achieved. There has to be a sleeve that's high. It would still have compression but coolant can travel into the cam chamber and arrive in the pan.
Not a bad experience, just an educational one. it was fate. I knew now to turn my attention to the Gordini Cross Flow, wiser than I was before.