Thread derail... the vanishing water was from the freeze plug trying to come out again but blocked by the plate and collar. There was just enough room by the freeze plug to push out water in small amounts while driving. When idling, or standing still with no load on the engine, it would not leak. Found the leak by virtue of dye...

So, once more for the viewing audience, there was enough force behind that freeze plug, with a bypass installed, to push the freeze plug out despite a collar over the plug with a steel plate bolted over it. It bent the steel plate! (about 1/8" steel!) not much, but just enough to leak.

 

dang that is crazy