The type four has had some sealing issues where the head meets the cylinders. I have found some causes and some solutions.
The head gaskets seem to leak fairly easily. Discarding them has no ill effect except raizing the CR slightly.
I have also found that lots of rebuilders use whatever washers are at hand.
The washers collapse under heat and torque and a leak starts.
I like a washer at least as thick as the std 8mm type one washer (they dont fit the type four so some need to be turned by a friendly machinist.
The othe cause is uneven torque when assembling as the sealing surface in our engines are quite small the applied torque is much greater than people assume. I have seen people distorting a block enough that the crank wont turn after they were finished.
the last thing is when heads are flycut. the two spigots must be exactly even depth. Jake Raby advocate smearing the head with a bit of copper grease to facilitate sealing.
Armand