Well. generally speaking the block heater is installed in the block, but being installed in the cooling system it will HELP warm up (or HELP keep it warm) better than nothing at all. Depending on the physical size / dimension of the heater, it might be able to angle the heating element in a way / direction that will also it to always be submerged in coolant. If that is a major concern, then moving it down into the block is going to be a better bet. I would not worry about it being damaged by not being fully submerged, but I would be more concerned with the cylinder head overheating because the coolant system is not full. When you drained the cooling system, did you remove any block drain plugs? If not, there could be some coolant that remained trapped / not drained, if you removed the radiator hose from the water pump. The reason is because the water pump inlet is higher level than the water jackets around the cylinders are deep inside of the block. In order to remove all of the water / coolant, you would have to remove a block drain plug, if you can get to it. With all of that said, I would top off the system & run the engine at low idle, while monitoring the water / coolant level in the radiator. Add more coolant / water as needed to top it off. Top off the coolant reservoir, too. The reservoir is important to keep full (to the cold full mark), as it HELPS keep THE RADIATOR full of fluid through vacuum, plus it gives the water somewhere to go during hot water expansion. I hope this helped.