This is a really interesting engine tech topic- thanks for posting. Here are some constructive thoughts.
Since it's blowing past the areas between the bolts, I agree that better bolts will likely not fix it.
The problem is it's over pressuring. The head is actually deflecting enough between the securing bolts that combustion gases are escaping past. If it lifts enough like that, no o-ring will stop that. Even with the S2 6 bolts/cyl provising shorter distance between the clamp bolts, it's still lifting/deflecting the head enough to leak combustin gases.
You run 60 psi boost, but what is the air density at that 60 psi? Do you have a way to measure the air temperature in the manifold at 60 psi?
Assuming it isn't detonating (and since no other parts like plugs seem to be destroyed that seems to be a fair assumption so far), then it's just flat out over pressuring.
The only way you have to control the peak pressure is to retard the timing. Again, assuming no other combustion funny stuff is occurring.
The engine can probably only safely keep a lid on about 1600-1700 psi peak pressure. Even a heavy duty diesel structure (and all heavy iron) will generally stay below ~ 1800 psi peak.
At say 1700 psi peak pressure, and with a 4.0" bore there is a peak force of > 21,000 lbs pushing down on the piston. AND upwards on the cylinder head at that point. That's like flippng the engine over and hanging
6 GN's from a hook bolt in the center of your combustion chamber. It's not hard to see that the head will move a few thousandths (at least)
in response under those conditions.
It also puts a huge peak load on the rod bearing at that point as well. In fact, you can get clever and tell where in CAD your pressure peak is occurring by examing the wear line that appears across the bearing. Where that line occurs in CAD is also ~ where the pressure peak is occurring.
It looks like you have done all you can to get the maximum clamping force and gasket sealing. Aside from running an Offy type setup with no joint between cylinder and head (lol) I think the only real fix will be to reduce the pressure peak back to within tolerable limits.
The big question then- what does your spark advance curve look like with that 60 psi boost?
If it's anywhere near even 20 deg at 60 psi (asuming a reasonable charge air temp and density as well) then I'm surprised that scouring out a bit of aluminum from head gasket leakeage is all the damage that has occurred so far. Considering that, looks like a great job in S2 engine design and in engine building I'd say!
"More power means you need to make more cylinder pressure!! " seems to make sense at first, and is the popular line in the glossy mags and such.. For example "Nitrous works by drastically increasing cylinder pressure!" they proudly trumpet. But fortunately there is much more to the story. See this article for starters:
http://www.kb-silvolite.com/test/article.php?action=read&A_id=7
One of the few true articles on the whole ww web on the topic in fact.
TurboTR