What I would do is a compression test as mentioned above, to test the condition of the rings. First, make sure each cylinder is within about 10% or so of each other. Then squirt oil in each spark plug hole and test again. If compression comes up a LOT when you do this, then it is due for a rebuild with new rings and a hone. Then that's what your money should go against.
If, however, the change was not that significant, then what I would do is leave the rings alone and I would take off the head. When you do this, it is very important you not only put a straight edge against the head, but also the block. If the block is straight, then you can have the head shaved. But if the block isn't straight either, then I wouldn't go any further with the head. This is because I made that mistake. I had the head shaved to increase compression to 9 1/2:1 but the block was warped, and so I can't make my head seal up.
If you are able to safely shave your head, that should run you about a hundred bucks to pump it up a point and a half in compression. Another hundred should allow you to replace the valve seats with hardened valve seats so you can run unleaded fuel.
Then what I would do is buy a set of either Fenton headers, or else tubular 235 headers available from Speedway Motors. That's a couple of hundred bucks.
Then finally, I would keep the single carb intake and instead would change over to either a Holley/Webber 2 bbl carb or a Holley/Carter 2 bbl carb, with a cast-aluminum adapter. I went with the Holley/Webber carb and gained both torque and power, and found an extra 500 or 600 rpm capability on the top end. I also picked up between 1 and 2 mpg. This should run you a little over $100 bucks through Langdon's Stovebolt and was one of the best modifications to my 235.
If you've got the money left...next thing I would put on the list is a Pertronix electronic ignition conversion for about $75 bucks from Summit Racing. It really made it easier to start my engine and was so much better than always adjusting my points.
If, after your compression test, you have some ring issues, you could delay rebuilding it by using Renew oil additive, which will increase your compression and your ring seal. But if you do need new rings, I wouldn't take the head off to shave it. Just make do and spend your money on other things, and save up for a rebuild.
