Video evidence here:  https://www.twitch.tv/videos/1895827194

This happened the first time I played since 1.20 update (did not happen in 1.19) in my village of 40+ villagers.  The Iron Golems started spawning in 2-block-high areas they did not belong, if the ceiling was dirt or dirt path blocks.  Their heads were in the dirt blocks, and they often, but not always, suffocated.   I shut down and restarted, and the issue remained. 

In the screenshots I had dug out the heads of 3 of the golems after the first one suffocated, but after watching the pattern play out several more times, it seems those 3 golems were not suffocating anyways as their heads were in dirt path blocks.  Those that did take damage did so immediately, and those 3 did not take any damage before I dug out their heads.  I eventually killed them to see where they would respawn, and they consistently spawned in the 2-block-high area with a dirt ceiling.   They did not spawn in 2-block-high areas with any kind of stone ceiling. A few times they would spawn below in the 3-block-high iron factory as designed. but they never did spawn in the open air above (farmland) like they would in 1.19.  It could be possible that they attempted to spawn in the open air above but somehow fell through the dirt to the level below.

This happens consistently in my world.  Let me know if I need to send a copy to reproduce the problem.

Description

Iron golems can spawn with head inside dirt block.  This usually (but not always) suffocates the golem. Non-suffocation may be related to whether the dirt block is a path.  The golem also turns black as it is suffocating, unless it happens to step on a stair (going down), in which case it returns to its normal (taking damage) coloration.

Steps to reproduce

1. On a flat surface made of solid blocks, make a 20x20 room of stone 3 high with a ceiling of stone.
2. Above the stone ceiling, make another room 2 blocks high with a ceiling of stone.  Place 20-40 beds.  Also place stairs going up.
3. Make a 3rd floor room 2 blocks high with a ceiling of dirt.  In some places make the dirt ceiling 1 block thick, in others 2 blocks thick, and in others make it a path 1 block thick.  Place a bell in the center of the room.  Place 20-40 workstations in the room.
4. Spawn 20-40 villagers on the 2nd and/or 3rd floor.
5. Wait for Iron Golems to spawn

Expected result

Iron golems will spawn in the first floor room, or above the 3rd floor room in the open air.  Golems should not spawn on the 2nd and 3rd floor as they are only 2 blocks high.

Actual result

Iron golems spawn in the 1st floor room (appropriately), but also on the 3rd floor (room with the workstations) with their heads in dirt blocks.  The golems will suffocate if the dirt is 2 blocks tall, and sometimes suffocate if the dirt is 1 block tall.  The golems might not suffocate if the dirt block is a path.  Iron Golems do not appear to spawn on the 2nd floor or above the 3rd floor.