should the head bolts turn in tightly... every single one turns almost like there cross threading..I thought maybe you should be able to turn them in by finger.

I've always been able to finger tighten my headbolts until it was in far enough to torque

I am wondering if they use them holes when they deck the block...MAYBE THE MACHINE shop screwed up the threads

I would run a tap through all of the hole just to be sure. Your actually suppose to do that anyways to clean them out but i dont see the need for that if you can screw them in by hand.

STOP!!
grab a tap and clean that shit before you royally mess it up!

the head bolts should drop in and be able to be put in with fingers until they are finger tight then torqued in sequence.

(same with Studs, they go in till they just seat then the head goes on then the nuts are added finger tight then torqued in sequence)

if you can, once the head is seated take a look in and see if it aligned correctly to make sure the holes match up. its an odd occurrence but i've seen them not be totally aligned and you end up scoring the head.

now if you were really concerned as to the condition of the threads (and your gonna want to boost more then 18psi) i would take it back to the machine shop with a set of 1/2 APR studs and have them re-drill and tap the holes for them to make sure that the threads are 100%
it may be overkill but i hate half-assing things like this and would rather overbuild (thanks Dad!) then have to redo it.