The exhaust valve gap can be closed up by lapping the valve. You be surprised how quick it closes up sometimes.
And when filing the intake stem to increase clearance keep it as square as possible. I usually rotate the valve as I file them down which helps keeping it squared. After the initial filing lap the valve and re-gap as needed. BTW it will not take a lot of filing either to over do it.
Now to that blown head gasket check your head and block for warp-age as it looks like it has been ran extremely hot. I had several from a local nursery here they are constantly clogging the cooling system.
Last edited by AVB; 25/10/15 11:50 PM.