Technical Mystery (to me) 59 AB

I picked up a 59 AB flathead from a friend for my 33 Tudor sedan about a week ago, and I pulled the intake manifold, and heads, to inspect the bores and the overall condition of the block.
Before I took it apart, I did a garage floor compression test with a 12 volt battery and help from my brother. It had 125-130 in every cylinder, so I was happy about that. Anyway...
I found adjustable tappets, and close to perfect cylinder bores.
Also, it has home made looking water jacketed (cooled?) exhaust manifolds.
And these markings on the pistons, and valve relieves in the block. And input would be appreciated.

 

Don't know why I can't upload pictures, I've done it 100's of times here.
The pistons have stamped on them:
3 7/16, 1/8 LC

 

Wow that's a big bore. I had ond 33/8+.030 and the walls were paper thin. Cracked early.

 

Yeah, I don't know, it looks good, and it was a good running engine, according to the buddy I bought it from..

 

Must have been goin in a boat. I would have run it after seeing those compression numbers, just sitting on the floor. let the neighbors know you are still tinkering with cars.

 

Check the stroke, with a Merc crank (4" stroke) that seems awfully close to 302 cubic inches, but if that turns out to be a 4-1/8" stroke that's around 312". A very big Flattie! Any idea when or who built it??