Having a closer look at that engine, it displays a resemblance cosmetically at least with the 175cc OHC Lodola, which in itself was a departure from the trade mark Guzzi single parallel to cylinder cooling fins. The fact this Lodola was in production from 1956-66 nicely spans the date of your excellent find.
I wonder if it shares the OHC design where the cam chain sits within the cylinder and head castings.
The general resemblance to the Lodola had me fooled at first, I spent a long time searching for Lodola's looking like this, but it seems to be a completely different engine. The crank cases are the same rough shape but very different in detail. It's an OHV system, you can see what look like crossed over pushrod tunnels under the fins on the right side of the engine:
Moto Guzzi 350 Militare tipo IV by
David Edmondson, on Flickr
I think that makes sense as military bikes seem to be more about robustness than high performance.
It also looks like they were thinking of putting the spark plug on that side then changed their minds after making the mould.
Lots to find out...
