Have they ran the engine up to the overheating temp and took a temp reading of the coolant? Then if it is over heating still it sounds to me like it may have a small crack in the block. They can't find it when it cold but when the engine gets up to operating temp the crack opens up. It may even be a internal leak where it can't be seen. I have worked close to 25 years on car and truck engines and it is rare but have come across something like this. It looks like the only thing left is a new engine block.