Well, I hit a snag today. I was not going to report on the mechanical issues, only on the build-out but I removed the heads and discovered the expected bad spot in the head gasket, this on cylinder #2 that was one of the two at 0 PSI in the compression test.
The surprise came on cylinder #4. No signs of other damage; all the valves look good so no telling what caused this. Now I need to figure out how to proceed. Short block? Used engine? Replace that one piston and proceed as planned? Abandon project completely?
I'll let you know what happens.