Crazy idea....right front caliper is hooked up to one of the rear brake cylinder lines and the residual pressure valve is keeping pressure applied. Trace the lines? Test - Opening then closing the right front caliper bleeder screw would relieve the pressure in the caliper and the wheel would spin freely again.
Photo is unclear but looks like a combination valve like JK says, which is not original on first gens. Original 67-69 system is here: http://www.camaros.org/brakevalve.shtml
The combination valve shown in that link is a later version, original combo valves were cast and more rounded. You said you replaced the distribution block which would indicate it is not a combo valve. Distribution blocks have no valving function per se. Read the link. If it is not a bad or stuck caliper, something is exerting excessive pressure on the system.