You can also get high temp powder coats, they are very resistant and you have to hit it with a hammer to chip it....
I painted my Boldor 900's engine with VHT and it worked very well, no chips. I heated the engine with a fan forced heater before painting and got an excellent finish.....No baking...
Mick
While we normally see eye to eye on things, I have to disagree with using High Temp Powder. Many of us custom coaters have quit offering it because it is so finicky when it comes to chipping and flaking. You can have a perfect job and the first time you go to a high pressure car wash it will blow off in huge flakes. High temp powders are for applications where the parts are normally subjected to temps as high as 1200*f. I see no need for high temp anything on engine cases. Standard powder coating colors can withstand spikes of 500*f. If you're anywhere near those temps on your engine cases you have serious issues and paint flaking will be the least of them. Powder coating is a great solution, not in the same budget as rattle can, but you'll probably only need to do it once in the lifetime of your motor. If I have an application that needs high temp coating, instead of high temp powder, I will use a ceramic coating instead.
My first thought was it was probably laid on too thick, but you said you used thin coats. Solvent issue has been mentioned a few times here. In my powder coating, the only liquid that gets near anything being coated after it gets blasted is Denatured Alcohol, which flashes off pretty rapidly with no residue.