340 heads on a 318?

If it was me, and I was camming up a little and not looking to spend anything, I'd use the 340/360 heads. Those that say "its a dog" havent had a good one I guess. Mine weren't dogs, even in an E body with 3.23s and the resulting 7-ish:1 compression. Overcamming will exacerbate the low end issues. So don't over cam it.
Now as for facts.. No 340/360 head will gain compression without machining, and to get the benefit, you'll end up doing more machining to make it all work together. In terms of the best budget option when you have some money... Stick a set of Engine Quest Magnums on it. Get them in the LA intake pattern, and plan on measuring and ordering pushrods and grabbing some stock Magnum rocker assemblies from the boneyard. You should be able to get the heads assembled with mild performance springs for $500 or thereabouts and they are perfect for a hot 318, and should gain you a little compression depending on the year of the 318 used.