Well, we gave it all a good look over, decided to roll the dice and replace the headgasket. We cleaned everything up and put her all back together. We did a compression test and #6 was at 32psi! Crap! After a few minutes of scratching our heads in unbelief, we checked the valve lash, Bingo! So we went thru all of them and had to cold lash them for now, but many on both sides were too tight. Another compression check and it came out good. So now just waiting for my exhaust gasket to arrive on Tuesday to finish it up and try again.