drujinin,
As I recall, there are 10 nuts holding the pony down, one of which is easy to overlook as it's tucked waaay back in a corner. I've taken the pony off with brute strength and awkwardness but it's a lot easier if you can rig a block and tackle/ come-a-long over it.

If you do decide to pull it off, remember when you put it back on to grease one side of the base gasket. .makes it easier the next time it comes off. Cat still makes the little o-ring type gasket that fits between the pony and main as well as the base gasket.

We addressed this problem not so long ago and Old Magnet had the answer. You can't get to those bottom water passages through the top of the pony motor. The passage opens from the diesel into the flywheel housing, turns up into the RH cylinder jacket of the pony, forks into a passage forward of the pony crankcase over to the LH water jacket, turns up into that jacket. You might get some air into that passage through the head surface openings but doubtful you will do much good if it's really plugged as it sounds like. Only real port into that passage is up through the bottom of the pony.

I'm just repeating what was said for my benefit. From here I'll let some more experienced mechanics elaborate if it be necessary.

do agree that it should come off.
I've tried to come up with a chemical way to get out of it but????
My thought is that if I take the pony off, then finish the main head and install this first, upon re-assembly it would be easier to get the water connection gaskets installed by resetting the pony motor.
Am I on the right track????

That's how I would do it. It's easier to get the top pony water gasket in place when you can tip the pony block a little to slide it in there. The pony side of the gasket has a raised lip around the opening that goes into a recessed groove around the top cover water outlet, the diesel side is flat. When the pony is tightened down the gasket is squeezed pretty good.

I work on the rest of the tractor. I can install the Diesel head, then do some clutch/brake work, then go back and pull the pony when I am ready.
Those 10 bolts holding it, Do they include those on the decompression lever?
Or all 10 are mounting bolts??