As much a I hate to say this I am not all that surprised and older Indy block is leaking especially if it had any repairs in its past. I have seen a few here that have done the same. Hopefully something simple. You may have some options if it is a leaky block however. Hope its not that bad and yes pressure test it before you tear it to far down. Seen a few of the old blocks leak around the bottom of the bore.....