I've been hesitant to step into this, bit I do see something that I have to comment on. If the heads were not up to snuff, and a new set was provided, why sell them and not send back the old ones? This looks bad on your part, as you admit you did this. I see in an earlier post about the new heads being sent when the old ones were yet to be sent back. Well, someone has to ship first. I don't feel the man shipped you new heads out of the blue without some kind of agreement to return the old heads. JMO. Also, if the short block is supposed to be bad, why is it for sale on here? Sticking it off on someone else because you got screwed isn't right. Something seems to be fishy here.
I don't know either party, and as such I'm not taking either side. It seems to me that neither side was happy with what they got, and only 1 side tried to make it right...