Your advice sounds convincing, as you have tried it for real. How was your idle ?

But still I am a litle scared by the high compression and particularly the wild cam.

Will the milder cam XE268H, ruin the whole set up.

???

I can´t tell if the 340 heads has been decked, I only remember it has the large valves and the condition was good.
It will of course have some influence, heads are still on the old motor. So difficult to state right now, unless there is a trick.

When you write "CC the heads" ,you mean meassure the combustion chamber volume, right. (Specs 65cc)
Is there any other specification that can state if material has been milled away.