Yes Kyle you have to pull the cyl, head & remove the studs from the cyl. And yes it will get in the water jackets, cyl etc.
Look up a glass shop near you and ask for a piece of scrap around 12" square or so, the thicker the better (without getting crazy.)
I taped on sandpaper and use acetone to wash away the filings. The tape came unglued on the bottom of the glass so I held the bottom of the paper with one hand and worked the cyl and head w/the other. This is also messy. I kept the tape dry on the top (furthest away from me) by putting two pencils under the glass. this way the acetone & filings run down away from the top edge.
I guess you could also lay some paint stirrers on the bottom of the sandpaper and use "C" clamps to hold it down,
(let the clamps overhang the workbench)
I move the pieces in a figure 8, I don't push down on the piece, just the weight of the part was enough to see it working.
The other reason I don't push down is to not "Influence" the cutting in any one place.
After you think you've gotten the parts flush, use some prussian blue to verify you got all the imperfections out of the mating surfaces.
Hope this helps some...
Tuck\o/
Maybe Larry or Jerry have a better way or Idea, I'd be interested in their opinion too.