most power from porting is done on the exhaust and transfers, but you would think they would at least clean up the cast flaws in the intake, but you never know, if you take your head off you'll see if it has or not.
if your head had been re chambered, id just take it off when you do and cc the combustion chambers to see where you are at, or just find a cool head with some 21 or so cc domes, depending on what fuel you want to run.
.042 is on the tight side for a 4mm, but i dont know how A/S build motors, have you tried calling them and asking about there stock head 421 motors ?
ive never done a leak down before, up to you. while its together you can check, or you can just buy some seals, gaskets and rings and rebuild the sucker.
if you put a lil bit of oil down the cylinders, does the compression come up ? ( oil will help seal the ring to the bore, if you get a substantial amount difference, your rings are worn.
did you try another gauge ?