Yup, lets be brutally honest: You open up a 50 year old high-mile engine, its likely gonna need a rebuild. Compression goes up after squirting oil in cylinders indicates worn rings. Smoking from the valve cover vent or road draft tube indicates blowby. Serious blowby indicates worn rings, pistons or cylinder walls.

Is this a later full-pressure 235, or the original babbit-beater unit? Unless you need to keep it original, find a later 55-62 235, build it and swap it in. The later 235s are much better, and will look almost identical to stock.

Don't pull the head unless you're ready to decend into rebuildland. Rebuildland is a strange mechanical theme park that has many dark, confusing rides and the admission price is steep. eek

best of luck

chip

Preaching the Hot Rod Gospel according to the 4-stroke apostles:

Suck, Squish, Fire and Fumes