Packard Don,
I think the slot is for engaging with a valve lapping tool.

The one on the left in the foreground appears to
have an "IH" which looks to me like International Harvester.
Of course Ken is correct that is an"N".

I know Ross has also seen these pictures, and he is an authority on what I suggest. There are people in almost
every part of the country who routinely "chop" tops.
Since that rust is in an unusual but important area stress
wise, perhaps an amputation and replacement would be in order. That is one area that even rusty parts cars might
still be good. That is going to be a beautiful car by the
way.

PackardDon is correct on that, I had a 56 GH with that problem.
But mine was only when "taking out" and turning at the same time.

The plate or "flapper" should NOT be shut when the engine is warm. There is a simple adjustment on the round black
bakelite cover on the side of the carburetor, loosening the three small screws around the perimeter of the cover should move the flapper directly, a rough adjustment can be made to rotate the cover toward "lean" just enough that the flapper is vertical.
A couple of things might not allow this to work, there is, under that black cap, a coiled spring, a peg, on the back of the cover, has to fit into a loop at the end of this spring. If the cover was put on improperly or the spring is broken.Other problems might involve a restricted tube that the hot air is drawn through.
Sorry Packard Don just repeating you

Is there a vent on that tranny? Seems like I remember one,
if so maybe it's plugged or restricted.

First guess would be a head gasket.

Sounds like it will be an excellent base to work from.
Of course be sure all the oil passages are clean.

I think Marston was correct, but not about your removal,
If the engine had an in car overhaul some time earlier
but the ring ridge wasn't removed completely, was then started, almost immediately the problem would occur.
This would explain the symptoms you were having,

OD is of course correct, but with the general condition of
the car, if it were mine, (I wish it was) I would give it some time, sticking valves could be causing this problem,
it should improve by running at a reasonably high RPM for
a few minutes then idle a while then repeat,you should know if it's helping if your idle starts smoothing out.