There is continuity from battery to block and from valve cover to firewall. However, it appears the block somehow is not grounded itself. I'm not aware of there being a block to body ground connection - where would it be?

Forget about that wimpy valve cover ground. That's just meant to reduce radio static from the ignition. It may be showing you "continuity from battery to block" if you have the battery grounded to the body, but it's not meant to carry ANY current. The car will start and run fine without it.

Your negative battery cable terminal should have two separate grounding cables — one connects to the inner fender (body). The other one to a bolt on the engine–at the bracket for the PS pump I think (I don't have an '80 to look at).

EDIT UPDATE: It seems like we all missed the clue in your Sun Sep 23 23:34 post above, where you said:

"1) The negative battery cable is brand new .... The connections (2) to the body are good as far as I can tell."

One of those "(2)" connections is meant for engine grounding. The other ONE goes to the body.
You will smoke that little one on the valve cover if that correct engine ground is missing.
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Bruce Young
'93 940-NA (current), 240s (one V8), 140s, 122s, since '63.