Pat beat me to it, and I was going to agree with Techinspector, verify the clearance between the pickup and the pan bottom. Especially on someone elses "rebuilt / built" motor. Seen a few that the pickup came loose from the pump and got sucked into the pan.

It'll cost you the time and a gasket but that's cheaper than another rebuild / repair! And if the clearance is fine, ensure it's welded!