Thanks for your take on that dj. What you say makes sense. But it makes more sense that they have the larger bore engines have their own unique gasket design rather then working with existing templates. And if the oil returns lack of adequate clearance around it, due to the increased diameter, it makes sense to have external oil return lines. This eliminates this issue completely.
Why is the 113 having no issues? And if that's proven already, why not take the same approach for the 110? This has not been an easy pill to swallow. If mine leaks again, I'm thinking of going with external oil lines and ductile iron cylinders. This dance that everyone's doing with HD's getting kinda old!
As always, great info man!
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Hoist! 
I believe Milwaukee, like any manufacturer is challenged to manage manufacturing costs, in part through the commonization of components; maintaining the same head bolt pattern would go a long way towards accomplishing this. That theory is supported by Milwaukee’s commonization of the earlier, time tested head gasket design of the TC-88 and TC-96 to the latest design which no longer uses a separate o-ring to seal the oil return passage.
Regarding external oil return lines or the laminated steel SE head gaskets; you or I would consider these options if we were building our own engines. It is my sense that a properly designed “production” head gasket would do the job just as well in a stock machine at a much lower cost. If I may state the obvious; the trick for Milwaukee is getting together with a vendor to adequately develop and test the new components prior to releasing them. In this case I speculate that the effect of repeated hot and cold cycles on the new gasket was not adequately simulated in testing; regardless of the number hours logged on the test engines.
Let’s hope that you don’t have to mess with your head gaskets again. If you must revisit this, I suggest running the Screamin’ Eagle, high compression, laminated steel gaskets (or equivalent). I don’t see a specific application for the 110; maybe the ’08 SE catalog will have one listed. I am running these gaskets in my 113 with somewhere around 17,000+ miles and they are as dry as a popcorn fart.
You mention the possibility of running ductile iron cylinders: I don’t have any experience with them outside of boring several hundred pre-EVO H-D cylinders. IMHO iron makes a great cylinder liner, but is a lousy heat sink. Iron is tough and if a lined aluminum cylinder isn’t robust enough to get it done for you, then maybe an iron cylinder is a better choice. If you are going to be pounding your machine “Hoist style” through the Sunbelt in July or August, you might want to reconsider your decision to run iron cylinders. It is my sense that an iron cylinder would be a good choice for the drag strip and not so great for an over the road machine; JMHO.
Who is this guy anyway?

Look in a mirror Hoist; I’m a resourceful enthusiast who just wants to ride his machine….which sounds pretty good right about now!!
djkak