That vent is my only vent from the system.  It goes to a small surge can with a 16 psi cap which vent to 2 larger pressurized cans on the firewall.


Unless I misunderstand (I remember this happening once J) this is like no vent at all; unless the cap is off the surge tank.  Yeah, I know you know that, but were kind of out in space here trying to figure something out.  It seems that without a vent at the exit from the pump there will be some air trapped in the pump no? 

        I think Al has hit the nail on the head.

        If the top engine vent is connected to the surge can, but the surge can has no other connection, then there is no engine vent. There must be flow for the vent line to work properly. Otherwise, air will collect in the top of the block and have nowhere to go. Also, if the line from the block to the can is small (or looped,) trapped air may not be able to "bubble" up from the block.

        If this is indeed the problem, you need to plumb a second line from the bottom of the surge can to somewhere near the pump intake to motivate the water to flow to the can from the vent line.

        If there were some way to push water into the system with a garden hose, you could remove the cap, turn on the hose slightly, and then test-run the engine. If the cooling system starts to work correctly, then you have found the problem.