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Clean it well with brake clean. Sand it and clean it again. Also clean the hose. Put a light skim cote of RTV on it and install the hose. Also make sure it is not coming from the water pump weep hole and running down.
Nice car. Great bones plus a/c. I would stick with what you have. Rebuild the 383, aluminum heads, EFI. Rebuild the transmission and rear end. Disc brake conversion along with an updated vintage or classic a/c system. Then the body and interior. You will sink an easy 80 to 100 grand into it.