Help me diagnose why my head gasket blew

If your crank is going to the crank grinder have them verify the stroke and index. Definitely start with another block, sounds like the old one is a lost cause. It sucks that the shop couldn't get such basic block machining operations right. Might want to have the block bored, then check the piston to deck height so as to know just how much needs to come off the deck to achieve 0 deck.