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Great question. As long as the engine block operates below 350F (which most water cooled engines do), you can absolutely coat the engine block with KBS MAXX.
To accomplish this: Clean the block well with KBS Klean first and then apply a few thin, covering coats of KBS MAXX which can be brushed or sprayed on the engine block.
Please check out the KBS MAXX Directions and let us know if you have any additional questions.