Don,
I have used the old tin head gaskets that were only .019 thick and had no leaking problem. I am using the copper head gaskets now they are .031 thick no problem. I like to apply a pretty good coat of copper coat spray on the gasket before putting it on, does it really help, I think so.

One man gang. Do you think you could have dropped a valve and cracked your cylinder wall or head therefore getting water in your engine? I agree you need to take the heads off and see what you have.
One other thing, I would get rid of those short 400 rods, you are asking for trouble with those if you plan on turning the motor over 4500 rpms. It will eventually throw one. The other thing with a 400 is you should run head studs and nuts to get a better seal on your head to your engine.