I have a 12" XCR-M. It's a lot of fun and pretty nice in terms of portability. That said, there's a LOT of drop out of a 12" bbl for obvious reasons. Hell, a 16" is short for .308.
With a can, it's just a little longer than a 16".
I have the type 2 and type 3 blocks (*EDIT*...the type 2 is on my 16" -M). I personally prefer the Type 3 for the simplicity and adjustability.
I'd go light over heavy bbl since it's already 8.5 lbs without an optic.