I take it you got that engine at the auction? Congrats. A pic or two of the installation would help. First of all, I'm concerned, too, about the height of the cooling tank. Most of these engines are cooled by thermosiphon, which means that the surface of the water in the cooling tank has to be located well above the engine to allow hot water to rise in the upper hose and cooler water to descend from the bottom of the tank. If there are any dips in the hoses, especially the upper hose, then coolant flow won't occur. If the water level is below the top of the outlet of the upper hose into the tank, no flow will occur. Some engines were fitted with centrifugal water pumps run off the crankshaft.
But just to start the engine, it won't matter whether the cooling system is set up correctly. Make sure the engine is bolted down to something solid, look in the access door and make sure everything looks good inside (no rats nests or tools stored in there). Oil level should be within 1/4 to 1/2" of the bottom of the bottom of the connecting rod and the dipper should be mostly immersed in oil. Crank the engine over with the compression released and listen for any odd noises. The lever on the fuel rack should be down for run, up for shut off. With the lever down, you should hear a distinct ping, creak, tink, or whatever onomatopoetic term you think is appropriate as the fuel injector fires. If you don't hear that sound you need to bleed air out of the fuel lines. Start from the tank and loosen each fitting in turn and make sure fuel leaks out, with no air bubbles. Expect to make a mess. Once you get to the injector pump, loosen the nut on top and crank the engine over. If fuel leaks out with every other turn of the crankshaft, tighten the nut down, then loosen the nut where the high pressure fuel line connects to the injector. Continue cranking the engine over until fuel leaks out at that connection. Then tighten the nut. Continue cranking (by now your arm will be getting tired/sore. It'll be worse tomorrow morning). Don't hear any ping/tink/crak/etc? Repeat until you do. If no fuel flows from the fuel pump, remove the nut and delivery valve from the top of the pump and slowly crank the engine over until you see fuel flowing from the top of the pump. All the foregoing is easier to do when the fuel tank is full. If the tank isn't very full, there may not be enough head to cause fuel to flow. Especially if it's cold. This process may take you 1/2 hour or even more until you get all the bubbles out. Eventually you'll hear the magic sound. Spin the flywheel over rapidly, drop the compression release and you should be rewarded with puffs of dense, fragrant black smoke. Be ready to flip the fuel rack lever off (up) in case the governor sticks or isn't set correctly and the engine overspeeds. This engine is made to run at 650 rpm. If you don't have a tach, that means exhaust pulses will occur about as fast as you can say "one-two-three-four" without tripping over your tongue.
Rotsa Ruck and check back here if you have any more problems.
Quinn