Here's the latest,
I reinstalled the head and warmed it up to operating temp then performed a dry compression test in the order of Cyl 1, 2, 3, 4 respectively:
DRY: 160, 158, 160, 152
Still a little high I verified my compression gauge is reading accurately. I installed a beautiful NOS Delco distributor brand new from the 80s and transferred my pertronix kit. TOTAL ADVANCE (including initial timing of 6*) is hitting about 30-31*, much better than 40*. Scott, according to my Service manual 10, it should be 25-29 degrees mechanical advance, not 20?
My spark plugs are still black and there is a small amount of blue/white smoke from the exhaust. The smoke I assume is from Cyl 3's valve guides but maybe all the valve guides are leaking a little oil making the readings higher? Either way, If one set is leaking oil, should probably have all of the guides checked.
The pistons I have installed are from Sealed Power H896CP.
I suppose right now I'll have the guides repaired (there's a noticeable amount of slop in them). Hopefully that will help lower my compression. If it does not, should I still consider a thinner head gasket? If so, is a .006" thick head gasket/shim unheard of? Just trying to avoid pulling the engine but may have no choice.. Thing is, the engine idles beautifully like a sewing machine. I just don't want to have it destroyed by detonation again.
Pics of the new distributor and current spark plug color:
https://photos.app.goo.gl/7PDVeJrUik6fuuFn8
Thanks y'all