Other than a gasket kit and a few hours work you have nothing to lose by pulling the head so I'd go that way. There IS chance that the nut is stuck behind the intake valve in the port and that might be what you're hearing so I'd pull the intake manifold first and see what you can see. If the nut is there you just remove it and I'd run thru a valve adjustment (always a good plan on these) and see what you get - might be OK.

On making a sleeper out of the 240 - look thoroughly for rust first! These tend to rust significantly and you don't want to bolt in 300-400 HP only to twist up the chassis. The rust can be well hidden in them so start at the rear jack pockets, the rear window channel, and under the battery box as well as a general check. BTW - I'd suggest a small block Ford (a 5.0 would be a good choice) w/aluminum heads to keep the weight down. They're pretty small and fit lots of applications better than a Chevy.

Best of luck to you

Dan