We need more information, there were a range of 1673 engines. An engine serial number prefix would help.
History of these Cat truck engines; (talking from memory here, to be 100% precise, I'd have to go search my Cat Product Bulletin archives).
Around 1960, Cat released their "new" 1673 truck engine. This engine was 4.5" bore x 5.5" and based on the tractor/industrial D333 Cat engine, which came out in 1959 as one of the new line of Cat high-speed diesels.
Everyone was chasing "high-speed" in the late 1950's, as the secret to diesel performance in those days.
Allis-Chalmers led the pack, with their release of their new, direct-injection, high-speed (2000RPM) "Thousand Series" diesel engines in 1958.
Most diesels before then, were limited to 1700-1800RPM. Allis-Chalmers had been using the Buda-designed engines with Lanova-type injection, which was speed-limited to 1800RPM. Higher RPM's mean greater engine efficiency and power output.
Cat didn't want to be left behind, so they followed the other manufacturers with a complete new range of high-speed diesels from 1959 to the early 1960's.
The 1673 wasn't one of Cat's finest engines. The 1673 ran at 2200RPM and this really was at the engines limit. Also, because it was basically a tractor/industrial engine, it was heavy (1940lbs).
Cat had a lot of problems with the early 1673 engines. They were a design that had a lot of poor design features. Along with the head gasket, Cat used brass ferrules with rubber grommets to seal the cylinder head/block interface.
These brass ferrules and grommets are a mechanics nightmare, and a good source of leaks. When re-installing the cylinder head, great care must be taken to avoid crushing the brass ferrules or damaging the grommets.
The 1673 suffered from head cracking, heads falling off valves, occasional cracked blocks, occasional spun bearings. It produced 254HP, which was a lot of HP for a 525 cu inch engine in that era.
Cat, to their credit, did a vast amount of re-design, more re-design, and even more re-design and modifications to these engines, to try and improve their reliability.
Cat modified the 1673 so much, they produced a 1673B around 1963 or '64. This was an improvement, but it still wasn't anywhere near as reliable an engine as a Cummins or GM diesel (they were called GM diesels back then, they didn't become Detroit Diesels until many years later).
Then, in 1967, Cat produced the 1673C. This was a vastly improved truck engine, because it was a totally new design, which was based on the new 4.75" bore D333C tractor/industrial engine - which engine was later renamed the 3306.
The 1673C is a pretty good engine - but if your Peterbilt is a 1966 build, it more likely has the earlier 4.5" bore 1673 or 1673B engine.
A quick look at the rocker cover will show whether you have a 4.5" bore 1673 or 1673B, or a 4.75" bore 1673C. The 4.5" bore 1673 and 1673B engines use a cast aluminium cover, the 4.75" bore engine uses a pressed steel cover.
I would guess by now, your Peterbilt engine would have been probably rebuilt, and probably more than once, because she's probably a multi-million miler.
In which case, your 1673 engine would have received numerous upgraded and improved components.
However - if your 1673 is an early 4.5" bore engine and in need of overhaul, I'd say you're best advised to scrap it, and look for a good 1673C runner.
The 1673C is a far more reliable engine, there are hundreds of thousands of them still working, and all parts are still readily available.