Cylinder to head sealing ring Options

[76912E]

I have a 1976 912E with the 2L Type 4 engine and L-Jetronic FI. I'm posting here because there are many more 914's than 912E's. The engine was rebuilt about 23 years ago with new, stock sized Euro pistons/cylinders, bearings and the heads rebuilt, etc. The car only has about 500 miles on it since the rebuild and has been stored inside all of that time. The last time I ran the engine, I noticed a rattling/banging noise in the area of the No. 1 & 2 cylinders (passenger side on a 912). Yesterday, I pulled the engine/transmission assembly to investigate further. My concern was a dropped valve seat. First, I adjusted all the valves with the intake manifolds off to observe intake valve action, by spinning the engine with the starter. I didn't hear any strange noises. The intake valves appeared seated. Next, I did a compression test and the No. 1 cylinder was at 50 PSI. The others were all above 100. I decided to pull the No.1-2 cylinder head to see if the exhaust valves were OK. I found that the cylinder to head sealing ring on the No. 1 cylinder had a one inch piece missing near the spark plug hole towards the exhaust valve. It looks as if the piston was beating on it a bit, hence the noise. Now for the problem. The head sealing surface has a small indent/scrap type scar (about an inch long) where the 2 ends of sealing ring broke away. I'm guessing the depth is a few thousands deep. Do you think if I "blend" the scar, by removing any high spots and just replace the sealing ring will work OK (it will completely cover the scar). Or, should I have the sealing area milled down on both cylinders? I live in the middle of the woods in Northern NH and don't have any local resources around that could do that type of work. The head would have to be sent out. Are there any good Type 4 head specialist in the New England area.

BTW, has anyone heard of a sealing ring doing this? They were all new at the time of the rebuild.

Thanks, Fran