Brian:

The combination sounds reasonably well balanced (the dual plane and small carb are good ideas). I would not put in any more camshaft than that without cylinder head porting. I would not use that cam unless it has at least 112 degrees of lobe separation (I think those SVO cams are 112-114). Any less and you will lose torque. The wider the l/s the wider the powerband will be and the more torque the engine will make as it will build more cylinder pressure.

Do not be afraid to mill the heads to gain compression. Most people say to keep compression between 9-9.5:1 for a daily driven car. I know from my own experience that you can safely run 10:1 on 93 pump gas with cast iron heads and not run into detonation problems (provided proper carb tuning and ignition timing). Compression=power. However, wehn milling the heads you must check for proper intake manifold alignment. Should not be any problems up to .050 mill.

One thing you MUST check before putting on the heads is valve to piston clearance. The combination of larger cam and milled heads will move the valves closer to the pistons. May not be an issue but needs to be checked.

Are you sure the ridge you feel is wear in the cylinder wall? An engine with that many miles will usually have carbon buildup above the top ring since there is nothing to scrape it off. It may be wear but I would check to make sure it is not a carbon deposit before I got too concerned about it.

To get the proper length pushrod, a valve train geometry check must be done. Milling and valve jobs can really affect the length of the pushrod needed.