I found someone to explain it to me,
He said to use .041 wire and cut groove .039 wide, let the wire come out .010 to .012 out of the head. The receiver groove in the block needs to be .051 wide and .020 deep.
He says the O ring always goes in the head and not the block, reason being is the the sleeve is hard and won’t distort and neither will the head with the ring in it, if you do it the other way what happens is the receiver groove in the aluminum of the head is soft, when the gasket gets stuffed into the edges of the receiver groove takes all the pressure and start to distort causing problems that can’t happen if the groove is in the block