I am not gonna "BS" you.It is time to take it apart.
Probably either a rotted head gasket(MOST likely)or a block/head bolt thread issue(maybe).Probably UNLIKELY,cracked block.(Unless you froze it up with water in it recently???)
Issue COULD be due to electrolysis.Diesels seem to do this alot.Errosion due to low volume electrical current produced by diesel engines.I have seen MANY,MANY engines deteriorated by this!It will eat up metal,but WITHOUT rusting.
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Today's Featured Article - New Life for an Old Allis - by Tyler Woods. My friend Jon, has an old '39 Allis Chalmers B. He thought it a marginal tractor that had long since served its time. She smoked terribly and never had much power but he couldn't afford another so he was limping along with what he had. Jon's Allis has a small front loader and though it doesn't carry much, it serves his needs. It was the hard starting and low power that made him think it was time to replace the old girl. Jon called me to help him discover why his tractor wouldn't start
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