I have an 86 EC w/305. I installed a set of 350 heads on my 305 about 4 months ago, since that time an exhaust leak started because the 350 heads did not have the xtra hole at #8 cyl to bolt the exhaust manifold up to,my friend that helped me negleted to tell me this,anyway- I just put another set of 350 heads on that have all new valves,keepers,springs,etc..the only thing I have done different was new head set bolts that have 1/2 inch heads not 5/8 inch like stock,which I used on right side only. I now have water shooting up under valve cover into air cleaner and oil in radiator but no sign of water in oil (yet). Does anyone know why? I used all new gaskets,torqed all bolts,went by the book. Any assistance would be great. thanks.

Is it doing it on both heads or one? Where under the valve cover, on the intake side? What has been done to the heads that you know of, any machining (milling)? Are you sure you didn't pinch or tear a gasket when installing the head(s) Are they the correct style of heads for your engine block and type intake manifold your using?

Did you use thread sealant on the head bolts? The bolts go directly into the water jacket and it is recommended to use teflon thread sealant.

the heads were done at a machine shop with new valves,keepers,retainers,springs,etc. basically the works. I originally had taken my old 305 heads to be fixed up but I ended up with 350 heads that will fit my block.I did notice the heads I just put on have much larger intake valves than the previous heads,even though both were 350 heads.
I believe water is comming up to valve cover in 4 sections,possibly above intake valves. I did use a sealent on bolts,one that does not harden and is ok for water areas. I just removed both valve covers,checked all bolt torques and also removed new bolts on right side and replaced with bolts from previous heads. About to give it another try.