There are two ways to get that compression increase- - - -the simplest being to acquire a later model cylinder head (1956-62) with "848" as the last three digits of the casting number. The same compression increase can be had by milling .090" off the 54-55 head, but a couple of other things need to be done. The intake valves need to be recessed into the head the same .090" to protect the edge of the valve from being burned by the flame front across the combustion chamber, and the rocker arm shaft stands are shimmed up the same distance to keep the pushrod length from becoming an issue. Then use a lash cap on top of the exhaust valve to keep the rocker arm geometry correct. It's a lot simpler to find an 848 head, which is what most engine builders do. The head on the 261 engine can be modified the same way, or an 848 head is a bolt-on fit after drilling a few holes for proper coolant flow past the bigger diameter 261 cylinders.
FYI- - - -that Powerglide engine also came with a hydraulic lifter camshaft. If it's been rebuilt at some time, it's possible that a solid lifter cam might have been installed. Modern offshore manufactured stovebolt hydraulic lifters are extremely troublesome about leaking down and getting noisy.
Jerry
