I would think it's a cracked head. That's a D342 engine; a 5.75"bore x 8" stroke engine. They made a million of them but the heads are getting a little scarce. I'd say it's cracked between the exhaust valve and the pre com chamber.
That stuff about running it full out and causing this soon after starting it is BS. Just another auction tale. It probably got hot at some time or the other due to radiator, water pump , fan, operator, or over fueling problems. The heads are the weaker point on these engines rather than the block.
They're not hard to fix. We can help you find the real problem so it'll stay fixed.
Ran machine to further check and it appears to be #1 cylinder and it is pressurizing system and when warmed up coolant quits coming out exhaust but starts to pressurize rad. I am thinking cracked head. #1Cylinder runs 30 - 40 degrees cooler until warmed up than rest. Engine temp goes up to 200 at head according to my infrared thermometer. Temp guage inoperative so will install new one as well as some of the other guages. Machine needs some love but is in good shape and I have a 3 shank 2 barrel ripper to install bought it to level out 14 acres of property. Anyone need a rear mount winch?
I'd add dropped or cracked liner and pre-com chamber leak to the check-off list. Might be worthwhile doing an air leakdown test before ripping it apart.
That makes it easier to diagnose if it's pressurizing the system. It has to be exhaust gases getting into the cooling system like OM says.
It could be pin holes in the pre com chambers or leaky steel gaskets on them, or more likely a low liner in the block.
OM can talk you through the air test to help diagnose.
It's really not that hard to fix.
How much for the winch?
Where is the winch?
Located in South Central BC in Canada. I live 2 hrs north of Spokane Wa and am 1 hr from border. Could deliver to a truck freight company for a buyer. Won't be pulling it for a few weeks. Want to get engine issue sorted first and then mount the ripper. As for price, is it worth 3500 to anyone? At that price I would guarantee it works, I am going to go through it before removal. Will post pics but I guess I will do that in the classified section.
Could be cracked counter bore in block causing liner to drop ,and head gasket to leak as a result of countner bore crack .I have seen many 342 and 353 engines with that problem
What is usual estimate to repair a dropped liner?
Doesn't sound like you have a huge earthworks job ahead of you, I had 3 tractors in my time with D342 engines, my first option would be to try some Chemiweld or Barsleak or such and give the tractor a couple of days good work out and see if it takes up. If it doesn't, my best guess is a cracked head (70%) or one of the other problems (30%). More often than not I found cracked heads, once a cracked liner and once a precom seal ring. You can lift and replace a head in a good afternoon on one of those old buses, just be careful to check out everything carefully, cracks, blown gasket, dropped liner etc. One tractor I had, worked for about 9,000 hrs with a cracked head, would seal up with Barsleak for a number of months (6 or even 20) at a time. you will need to see what the availability of heads for an older non spacer plate motor are, the Italians made plenty years ago. Best of luck, the tractor you have with a little TLC will reward you well, they are a hard to beat tractor. Neil