What exactly was done to the head/engine. I will not do a "valve job" on an engine. I have people send me heads for the job, but I will not do one on an engine myself. Alot of times when the upper end of the engine is rebuild, it amplies the wear in the pistons/cylinders/rings. I did a couple of valve jobs years ago and those engines all had smoking issues when hot. Based on your compression numbers, it might very well be a lower end issue. The compression will be high due to the fact the oil is getting past the oil control ring and aiding in the top & second ring seal. You might take off the muffler and see if it is one cylinder or all four.
In regards to deck height: The deck height was probably only machine until it was flat, but if it has been machined several times prior it is getting pretty short.
Let me know if I can be of further assistance.
Randy - RPM
rpm@swaybar.com
Thanks,