When I looked at block drawings this hole showed up on the 390 406 and 427 solid lifter blocks thru 1963. It did appear on some early 390 Hyd blocks, but I did not look at lot of the hyd block drawings. It may of been drilled on all blocks, whether hyd or mech, before 1963.
The hole reappeared on a 352 hyd lifter C7AE-6010-J (using the C8AE-C casting) cylinder block assy. I don't know what the engine application is. I guess they still used 352 engines in trucks at the time.
The hole also appears on the 427 C8AE-E and C8AE-H cylinder block drawings.
I believe the hole was used as an oil return port on certain industrial and/or marine applications, but I have no proof of this. Perhaps an oil filter adapter exists somewhere that compliments the block hole.
You can put this question on the same list as the "official" Ford definition of "FE" Engine.
