Okay, update time: It runs!
First I lapped the head. I had already milled the head but it warped very slightly where each of the for head studs clamped it. I did a few tests where I coated the face in Sharpie and gave it a quick hit on the lapping plate to see where my high and low spots remained. The black is low spot and the shiny is high. I got complete contact but this picture is from about halfway through:
The lapping process:
These next pictures are pretty terrible because my camera has a mind of its own with the flash. This is the deck surface. It was high across the top and bottom and where it previously blew out just below the oil port was the most pronounced low spot. I probably should have milled it but the setup work scared me into just lapping it for a week straight. Here's the initial test:
Halfway through:
And the final:
Since the side cover gasket kept pushing out, the side cover started to shear the two dowels. Also I gouged the head dowels yanking them out of the block. I machined new dowels, keeping the side cover dowels solid because there isn't any screw going threw them. I made three head dowels because there were three places in the head for them, then I put my head through the wall a few times when I tried to put the head gasket over three dowels.
I did the compression test a few different ways.
First I set the lash to 0.0015"-0.002" go-no-go on both valves and pulled it with the cord. That gave me 45 PSI.
Then I turned it over with an 800rpm drill. The compression release was still releasing compression: 50 PSI
1600rpm drill. To my surprise, the compression release was still engaged. Not sure if it got stuck or what: 90 PSI
Then I tried setting the exhaust valve lash on top of the compression release (I also indicated the lift of the compression release to be 0.061"). I had to put my big boy 120V drill in low gear and it was extremely violent, stripping out the clutch on occasion. At 400rpm it gave me 175 PSI.
Seeing I get 45 PSI pulling the engine, I already knew it wouldn't kick with the ignition off but I tried it anyway and got the predictable result. It actually didn't kick back even with the ignition on. And yes, I did set it back to 28* timing now. Now that I think about it, it used to kick when it had the old NRR 230 0611 cam and it hasn't since I swapped it for a MOD2.
All in all, it runs healthy now, pulls harder than it did before, but it didn't pick up as much as I expected it to.