<Snip>
I pressurised each cylinder to 120# and observed no leaking into the
coolant
tank and no loss of pressure for 15 minutes.
<Snip>

Hmmmm .... But what is the pressure provided by compression?

I believe you have a leak at one of the heads.  Possibly a deep crack
between the valve seats that only opens under great pressure, or an
upper gasket and O-ring that leaks under great pressure.

Anxious to learn of the answer.

Mike
'84 GL 7 pass
'85 GL Westy