I got the head cleaned up and also the top of the block today. Also got the valves lapped. I believe I found the reason for lack of compression beyond the crud buildup on the exhaust valve seat. There is no valve clearance whatsoever so I am going to take care of adjusting that tomorrow.
Wow... that is unusual. Just remember, when you file those valve stems the opposite of what your mom may have said about food applies. She may have said that "You can always add on, but you can't take away." For valve stems, it goes "You can always take aware, but it is hard to add on!"