The BLACK SEALANT is more likely a gasket maker. I understand your concern for the heat, but #2 will hang in there with it. Chase the manifold bolt holes with a tap or thread chaser, also the cap screws. Coat the threads that enter the water jacket fairly heavily (not enough to make a mess on your manifolds) and torque to the above torque value. Give it an hour to setup before refilling with coolant.
Cooling System Testing
1) Pressure Check- A tool is used to pressurize the cooling system (also checks radiator cap) and see if the pressure gauge holds while also looking for obvious leakage. Sometimes the leakage will be inside the engine and the pressure must be maintained for several hours and differing engine temperatures.
2) Exhaust Gas Presence- Again a special tool...A bulb is filled with a detection chemical and held over the radiator opening. If exhaust gasses are present (say bad head gasket), the chemical will change color. You then need to tear into the engine to find the leak.
Is the fluid coming from the exhaust pure water or does it have a tinge of coolant smell?
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