Yes, ran down the wheel well. Everything else is dry.
Roger that!
It is very common to see the 94-97 6.5 blocks get cracks in the mains which eventually creep up a cylinder wall forcing gasses to go into the coolant. Also cracks in the heads going threw the coolant passages. After doing a pressure test and not seeing any coolant come out of anywhere, I think it is safe to assume a cracked cylinder wall and/or head is your problem.
I recommend pulling the motor, taking off the heads and pistons to confirm.
Where to go from here?
Depending on your budget and your love for the old Gm diesels, you have many motor options!