[davidzo]

fin spacing is really wide. reducing the height of the fins will increase the velocity and aid cooling.
i would let the water also flow directly to the outlets without the 180° bend, but thats only for flowrate and won't affect performance much. many people also prefere twobarbed versions which does not affect performance as the outer channels are big enough compared to the more restrictive pin channels.
if it really should be done on a cnc mill consider a round or at least oval oring, it will be easier to mount and grant you with longer sealing lifetime. but its not that big of a deal, the oring in you rendering would also work ok.

currently it looks like the block is extremely hughe or does only have 1/8" Inlet Threads, which both wouldn't make sense. Try using a more rectangular and not square shaped form if you want a 3barbed block. width should be at least 38mm and lenght is good between 70 and 90 for an 3barb design. a two barb design is basically the same but a can be a mere 15mm shorter and mounted asymetrically (like Dangerden TDX).
Its always to have good and big outer channels for lower pressuredrop and to prevent recirculating of the water, but too big blocks are neither practical nor better in flowrates, thus keep it in a good balance.
It also doesn't help cooling to make the square pinfield in the middle bigger than current cpu dies as conroe or Kentsfield, it only harms flowrate.

As for the milling, dipping in the material is always connected to indreased mechanical wear of the milling bit. milling time also increases when a lot of turns and direction shifts are needed to mill everything. if you plan a lot of holes, better use a drill bit instead of a milling bit, cause especially the moderately priced high performance milling bits with a grinded fischtail which can go really fast in normal scenarios, don't like to be used in Z-Axis a lot.
Think over using the smaller bit which you also use for the o-ring, for a more common cross pinsection insted of using the bigger one as a drill(maybe 45° rotated). That would also solve the problem of too big spacing between the pins which you wouldn't have to solve with a decreased height. a bit between 1-2mm is still ok for axial milling bits. if you want smaller channels, you better use a radial slitsaw.