I believe Rock,... and also like the idea of blocking the little hole off, like skialot recommended. It's a leak directly down the poppet dump. Not unlike the hose from poppet cover to top of engine on later model stuff, but in a less ideal location. Maybe not enough to keep the block from filling with a operational pump, but it isn't helping. That little hole isn't far from your pump. If your having problems getting water there, you got no chance at the top of the block. We're only talking like 6 or 19 oz.of water above pump to that hole. How does a garden hose not fill the block with tight fitting muffs, properly installed (rotating) water pump and feed tube??? My guess is something isn't right in the water pump/feed, or plugged adapter plate.
The test pcrussell showed a video of is legit. Good for testing if your getting water through the block, or dislodging crud in adapter. If you were to momentarily apply water this way, then let drain, it could back flush junk out of the adapter that collects at the first low spot. Kinda the reverse of the method I mentioned a few posts back.
Attachment 524553this is where all the pebbles and fishing sinkers get stuck between the two plates.
Was your poppet, and associated parts present?
How are you feeding the engine water, ...muffs, trough, or lake? Your muffs good n tight?