I'm using Mr Gasket Ultra Seal #5981. I'm new to this but is this right where some water ports are completely blocked and others are partially blocked? All of the water jackets at the top are completely blocked.

 

They are supposed to be that way. I thought the Ultraseal's were white, look exactly like the Rocket Racing head gaskets I bought, except their head gaskets are .028" vs .038".

 

The openings in the block are large to allow the casting core sand to be removed. They are too large for correct cooling flow, thus the smaller holes in the gasket. Keep in mind that coolant flows rearward in the block, up to the head, then forward in the head. If the forward holes were too large, the coolant would take the path of least resistance (like a short circuit) from the block up to the head and the rear cylinders wouldn't get cooled.