Any 8.3 Cummins wizards on here?

If an o ring is hanging out from under a liner you know that is wrong! Just as a cold leak on a coolant hose, which you have probably seen, they can leak when different components expand and contract and different rates. Coolant hoses often leak when it is cold and not when it is hot. It could be at different temperatures but the key is the difference in temp between the two components.
Liners commonly have 3 o rings or a band and 2 o rings. So one o ring will not necessarily cause a failure.
Head cracked on top? I have never seen that. Normally they crack between the valve seats. Did it possibly freeze and crack?
Liners not clamped allowing coolant to leak? No! If you are going to turn the crank with the head off might want to soft bolt some washers down on the liners.
I have used some Reliance kits in Ford tractors. They were always puuurfect.
Look close at what the book says to use on the liner o rings and how to install them. I worked at a big company shop and we were building big cams back to back. They had hundreds of them at about 800,000 miles. I was the dish washer ( parts cleaner ) torque wrench puller. We had everything set up and 6 liners in a row. I oiled the O rings and installed them all. Then headed the liners with o rings over one after the other, bam bam bam and they were in. A 6 - 71 showed up and we did the same thing. The o rings expanded 30 -40 % before they could get to the truck. New o rings cost almost as much as cylinder kits back then. Then go back and read the book. Vegetable oil. Your Cummins book may say motor oil but you are not using Cummins parts. Those o rings are made to expand when exposed to oil so they should never leak. Some expand faster than others.
Do not thank a different block is your problem. Bought a truck short block, because it was a good deal, and put it in a Magnum. Had to change the timing cover for a different type fuel pump.

 

What is the cracks in the pistons deal you mentioned?

 

I thank that comes from them getting hot sometime.
If the o rings are rolled - twisted as they are put on the liner - that can cause distortion to the liner as they expand. Enough to score a piston skirt, crack a liner or just leak coolant in the oil. Maybe it could push part of the o ring out?

 

Did you clean the bores, check for rough spots, and check for out of round before installing the liners?
I've install hundreds of liners over the years with no problems, this sounds like a block problem or installation error.