Thats .016-.02 before TDC, right? I'm not sure about the HP but it is either 1 or 1.5. The head gasket, you don't mean the aluminum gasket, do you? Because that was off before and it was leaking air like crazy. The intake port is restricted, it looks like a gasket that went a little overboard, covering the intake hole and replacing it with an arbitrarily smaller hole.
I may upjet and experiment, but I bet i will see some serious gains if I make some simple improvements, just hoping to get some good solid advice from you guys about what sort of improvements.