The piston absolutely positively has to come out of the deck. I will check it when I start putting my junk back together but IIRC they are .054 out of the block and IIRC that's about .040 deck clearance.
As a general rule I don't go any closer than .040 because after that, any gains and benefits are so small it would take a world class dyno to measure it.
That's kinda why 35 is the number IF the deck clearance is more than about .055 or so. Even at the same compression ratio a tighter deck clearance will reduce total timing.