If you move the bore centers as your machinist proposes you could solve that part of the problem. If you are willing to accept the spec out of blueprint.
Or a half partial fill:
An idea for you, as I know you are capable of doing the most: Fill the block with fat first up to the lower level of where you want the bottom of the block fill, let solidify, then cast blockfiller from that level up to the upper level (an inch thick or so would do!). You can add some tubes stuck into the fat, before blockfiller, to enable waterchannels from the lower level to the upper. In this way you can copy the watersystem from the R5 block, it has a manifold below, distributing water into the cylinder jacket from holes.
When block filler is stiff, you simply heat up the block and drain the fat, and you have a supporting band of blockfiller exactly where you want it, in the middle of the cylinder to support it (or higher up where the forces are bigger).
Do it all before machining is done!
Yoy can use cocos fat (melts at 29 dC), take car that it does not climb up to the walls where the blockfiller will go...
Better than baking for X-mas!!!
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