i wouldnt put a laminated steel headgasket anywhere near a block or head that has been machined for o-rings... whats the headgasket going to bite into? the whole point of the o-ring is to have a ring of high clamping pressure, without it, what chance does a steel h/g have?
yes, id assume a gap would be significant. surely the rings were made so there was no end gap when installed properly?
doesnt 'quite' explain why every cyl is communicating with a water gallery, but its a start. like i said, id be getting a radiator gas analysis done before i thought any harder about whats going on