Re: Actual Blown Headgasket
The correct way to lap is in a figure eight pattern. 300 grit should handle the whole process. You will get a 10 micro finish no problem even dry. Wet sanding and going for a mirror finish is just gilding the lily. Hey knock yourself out if it makes you feel good but I prefer to work smart not hard. Wet sanding is generally only a cosmetic process.
If you have a nice cross hatch that feels smooth when you run a finger nail over it your there. Running a graphite pencil tip over a surface is another improvised test for micro finish.