Leaking gasket

I can see where the oil was seeping out. You won't be able to visually see the uneven surface until you lightly sand it for a second and the wear pattern reveals the low spots. You basically sand a bit, check, repeat until the entire surface is a dull shiny metallic finish.

The copper head gaskets can be used again sometimes. Ideally you would simply replace it, but you can always anneal it yourself if you have a torch. Simply heat until it starts to glow and then quench in cold water. This will fully soften the copper and allow it to seal properly. Thin copper sheet can be a bit tricky to heat evenly, so you have to keep that torch moving. Ideally an induction heater could be used, but not many people have that laying around.

Your spark plug shows evidence of both a rich and lean burn. Could be fueling, but could also be from a small leak. Until your head gasket is sealing properly, there isn't much point in trying to read the plug. Trying to judge any running condition while an engine has an active leak from a sealing surface is like trying to play tetris blindfolded.

On the positive side, the timing pattern on the plug is spot on.
Can I ask you how you can tell the timing pattern on the plug? That’s got me very curious
 
If you have been torquing the head properly and regularly, then your problem is that the head or cylinder, or both, mating surfaces are uneven. Not an uncommon problem at all and very well documented. The suggestion made to you is spot on. Just need a piece of glass, a mirror, or even a good thick piece of acrylic (a true flat surface) to tape down the sandpaper to, and then work it in a figure 8 pattern while keeping it flat against the surface until you see a nice even wear pattern across the entire surface.

I do this to all engines that I build, regardless of how cheap or expensive they were, and every single one of them needed it.
Would a quarter inch piece of plexiglass on a flat surface be sufficient for sanding down the head?
 
You've gotten all good replies. The one thing I would add is being you are new to this maybe start with 320 grit paper and finish with 400.
It may take a few more strokes but might keep from over doing things.
I would also suggest wiping the gasket surfaces of both the head and the cylinder with some carb cleaner oor acetone and then use a large perm marker to completely cover the surfaces. When you have lapped them flat all of the marker should be gone.
 
I can see where the oil was seeping out. You won't be able to visually see the uneven surface until you lightly sand it for a second and the wear pattern reveals the low spots. You basically sand a bit, check, repeat until the entire surface is a dull shiny metallic finish.

The copper head gaskets can be used again sometimes. Ideally you would simply replace it, but you can always anneal it yourself if you have a torch. Simply heat until it starts to glow and then quench in cold water. This will fully soften the copper and allow it to seal properly. Thin copper sheet can be a bit tricky to heat evenly, so you have to keep that torch moving. Ideally an induction heater could be used, but not many people have that laying around.

Your spark plug shows evidence of both a rich and lean burn. Could be fueling, but could also be from a small leak. Until your head gasket is sealing properly, there isn't much point in trying to read the plug. Trying to judge any running condition while an engine has an active leak from a sealing surface is like trying to play tetris blindfolded.

On the positive side, the timing pattern on the plug is spot on.
I sanded my head down with 400 grit wet sandpaper on a piece of glass. I wasn’t sure how far to go. I didn’t want to get carried away. Does this look ok?
 

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I sanded my head down with 400 grit wet sandpaper on a piece of glass. I wasn’t sure how far to go. I didn’t want to get carried away. Does this look ok?
I think your right hand lower bolt holt area is still low on the gasket sealing surface. You can see a dull area about 1/4 of that head gasket sealing surface around that lower right hand side.
 
Can I ask you how you can tell the timing pattern on the plug? That’s got me very curious
I'll let Steve Morris explain it for me.

Would a quarter inch piece of plexiglass on a flat surface be sufficient for sanding down the head?
as long as it doesn't flex or you have a solid surface to put it on.
I think your right hand lower bolt holt area is still low on the gasket sealing surface. You can see a dull area about 1/4 of that head gasket sealing surface around that lower right hand side.
I agree. That whole quarter section is definitely looking a bit low
So you think I should go a little more?
Yes. You want to go until the entire surface is the same.
 
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