If you think about it after you look at the ferrules and seals and all, you will see that the only thing the head gasket does is seal the top of the liners, outside the first step, to the head. All water and oil is handled by the ferrules. Caterpillar instructions were to use aluminum paint on the head gaskets and nothing else. The Cat brand gaskets came with aluminum paint on them back then, We never used any kind of chemical goop on head gaskets. The only time we had any problems with gasket failures was when liner projection was not correct. The liners work themselves down into the block and get "low". If you start with low or uneven liners, everything else will be for naught. The specs given above are correct. You check the liners in four corners, with them bolted down as shown. Make sure that there is a minimum of .002 on the projection above the block (max .005) . There should not be more than .002 difference between the measurements one one liner or between adjacent liners. But the only thing that will leak from the head gasket will be compression (which may be oily). A crack in the head - usually between the pre cup and the exhaust valve, but possible most anywhere- will cause a compression leak into the cooling system but will not always put coolant in the oil. If I take off a head; I always have it Magna Fluxed or dye checked. I also pull the pre cups and change the metal seals under them. Be sure you have a decent seating surface for them on the head surface - this area corrodes easily because the seals are (were) made of aluminum. Be sure to use anti-sieze on the pre cup threads and both side of the seals. A cheap insurance policy for your time and parts costs. If you have an oil or coolant leak under they cylinder head, the problem almost certainally is from one of the ferrule/seal assemblies. Typically, the larger ferrules carry water and the smalller ones carry pressure oil. The seating surface on the head and top of block sometimes become pitted and rough, and this area must be smooth to seal on the rubber grommets. There is a measurement in the little yellow "Servicemans Reference Book Caterpillar D2 Tractor" on the specifications page for steering clutch minimum overall width plates and discs. Unfortunately I do not have that book with me. One last thing was that all of these old tractors recommended 30 weight (straight-weight) motor oil Series 3 (That was the spec for a hi detergent diesel engine oil) Shell Rotella 30 wt was what we used.
Doc