I have a 1972 universal pre-heat ballast for 2 F40 40 watt lamps. After letting it run for about an hour with 40 watt T12 lamps the ballast is really hot to the touch. Is this normal?
The ballast was new old stock so it was never used before.

How hot is it..? Magnetic ballasts do get hot, but it's dependent on a lot of things, such as where it is installed, ventilation, etc. There should be a temperature figure marked on the ballast label somewhere..?

Can only touch it for a second without burning myself. The other end of the ballast is just warm.

The right hand side of the label is out of focus but I can't see anything that resembles a temperature reading, obviously yet another difference between US and UK ballasts..! If you haven't got one, it's a good idea to get one of those laser thermometers, just aim it at the hot part and see what the reading is. Over here, it's usually something like 65°C or so above ambient, so unless you can actually boil a kettle on it, you should be ok. If you're worried, you could aim a small PC type fan at it like this 

Here's a picture of mine and I don't recall seeing any temperature ratings on the label. Most North American ballasts aren't labelled with the ΔT like on European ballasts. Fluorescent ballasts typically don't have temperature ratings here, HID ballasts typically have a UL temperature rise code which can used to get the ΔT.

Anyways magnetic ballasts do get hot. I have a 2x40w RS fixture in what's a rather ideal case for heat dissipation (open louvered style fixture, fixture suspended from ceiling) and that gets to a peak of around 75°C after around an hour of operation. Something like a 4 lamp wraparound style fixture mounted against the ceiling would run a bit hotter. I'd get one of those IR thermometers and aim it at the ballast to get an idea of how hot it gets. If it gets hot, you might have to use it in a fixture that dissipates heat better.