flaking probably won't happen since these coatings should be ceramic based, therefor baked on. If the surface is properly blasted and cleaned, there shouldn't be any problems. Any sort of performance coatings place would be able to put an oil shedding coating on the block. They can also put the coating in the head, and various other places, to get it to go back to the pan faster, which gets the heat out of the system faster too.
and like k20z1 said, you can coat damn near everything now. Your stock KA pistons have a ceramic coating on them, but you can also coat exhaust ports and combustion chambers, inside and outside of exhaust headers, valves, bearings can be coated with anti-friction coatings. Can't really coat the intake ports due to fuel atomization, but just about everything else is capable of it.
Just costs money
This is a place local to me, I haven't had any work done, but it's where I'd go if I was to do it.
http://www.performancecoatings.com/