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I'd suggest laying a head gasket across it and see where the conflict is. Not familiar with LT gaskets, but many are a good bit larger than the bore (to account for boring, etc).
It is a critical area as the head gasket 'fire ring' passes invicinity...it seals off all the combustion pressure between the head and block. Really a bad place to have an imperfection.
You should certainly try something as decking/replacing the block is the worst case scenario.
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