@Bushie: Yes, I'm spoilt when it comes to local sources. Water/laser cutting - 10km, carbon fibre wizard - 37km, porting/tuning guru - 25km, 5-axis CNC millling - 12km, braked dyno stand, 12km, Folan - 12km.
When I was using copper gaskets (Yamaha TT600, well.. 690cc and 12,7:1), I had to machine a groove in the edge of the liner, and place a stainless wire there. It was "crushing" into the copper gasket with 0,10-0,15 mm. The copper gasket had to be throughly heated, to get soft, inbetween each assembly. I suppose you can get the same effect by letting the liner raise some 0,05 mm above the cylinder deck. When I got a liner back from Nicasil-treatment it was too low. I made myself a thin steel ring, that fitted under the liner "flange". Then I could put the liner in the lathe and cut it to the required height. Just a thought.
About the water channels. Would it be possible to machine the holes in the copper gasket a little larger than the channel, and then fit a small o-rings inside? If they were appr. 15% thicker than the gasket, I sure it would keep tight.
You see? There are Bush-mechanics even in the far north!