Cracker,
A few flags went up when I read your cleveland problems.
The first one that jumps out at me is, "bottom end/pistons/cylinders all looked good and left alone."
"bad cam (it is original though and has never been removed)"
Then you stated that "bad valve components (unlikely due to complete overhaul by excellent group)."
Please clear up a few things:
Was the short block left alone, or did it recieve new rings and bearings?
Or did you just pull the intake and heads off and the "complete overhaul is refering to the heads?
If you just pulled the heads off, then the most likely problem (and going by the compression test) is a blown head gasket. you have all of the symptoms, close to equal pressure on adjacent cylinders, popping back thru the carb.
It is very easy to get one of the head gaskets on backwards on a cleveland, I know, been there-done that!
If the mech. was not a "Ford" guy, head gasket is my guess.
Now, if the engine was overhauled, and you stated that the cam was not removed, then we have a whole new can of worms!
I'll wait and hear back from you before we open that can
