Alright, finally got around do to it and tore the head off. It does look like I had an oil leak right where the mechanic said his dye was coming out, the oil passage on the front side of the head, passenger side, closest to the exhaust sprocket.
So I pulled the head and sent it to the machine shop for a refresh. Valve stem seals, cleaning, and a check on the if it was warped. They found a very slight warp, .004, and milled the head until flat.
So I got the engine all back together, Cometic head gasket and ARP head studs, it went fairly well, had a little trouble with a bad intake stud, and one bad exhaust stud pulling out when tightening the exhaust manifold, but it isn't leaking, so I'm ok with it right now.
I have a worse problem. It isn't running right. I started her back up and she sounds bad. Almost like it's missing, with tons of valve clatter (lifter noise). I checked timing and it was not bad, set at TDC, so I followed the sticker on the underside of the hood and pulled the advance vacuum hose, plugged it and put my light on it. I set it at 12 deg BTDC and shut it off and put the vacuum back on. Restarted her, no different. In fact, she stayed at about 12 deg BTDC (not much vac on that advance hose at idle).
I'm scratching my head - not the car's. Maybe timing is off? I'm an old bodyman, not a mechanic. Maybe the shop messed up on the lifters? I pulled each plug wire to see if it was firing on all and it is, it loses a lot for each one I pull. I don't know what to do. Pull the belt side apart again and check all the marks? This is the first time I used the TDC mark on the little gauge on the timing cover, every other time I had the harmonic balancer and main pulley off and used the TDC mark on the oil pump. Maybe I screwed this up or could a lifter be stuck? And if so, why? Help!