If it was mine,I would pull a head off and measure stuff. I have reused head gaskets two and three times.
But failing that, like T-N-T says,2800 will get you back some grunt.
And that rear has got to go. Someone said your car will be a turd to 30mph. I say more like 40.
The engine won't wake up until maybe 3500rpm.Those 205/70-14s are about 79.5 in circumference.
So
(3500x79.5)/ (1056x2.71x2.45)=39.7mph. Getting to that 3500 is gonna be the big deal.But I guess that teener might spin one of those skinny donuts, so it might not be so bad. At least until the spiders seize up...............
But, I can see the disappointment on your face already. So with the lack of compression,you are gonna need 4.10s to get going at 26 mph, and at least a 2400 to do so with any kind of authority.
3.55s will make it 30mph. But the loss of torque multiplication means you need more TC;perhaps 2800
Of course a DP carb, well tuned,might make the 3.55s move out a little better.... Oh wait, no compression,scrap that idea. No compression means, the engine will likely bog,perhaps big-time, with a DP,even with 3.55s and a 2400.
At this point getting the compression up to where it needs to be is still cheaper than all the other options. And waaaay more satisfying in the end. If you boost the Dcr up to 8 or even 8.2, you may get away with the stock TC. And I bet you were gonna put 3.55s in it anyway. And at that point,she will be ready to rock.