1974 Porsche 914 2.0 liter - just purchased this spring

I have pulled my engine to get body painted. With engine out I'm changing out items to eliminate oil leaks. One item is push rod O rings, when I pulled spark plugs I noticed oil residue on all 4 plugs. Ran borescope into each cylinder and saw a black residue on top of piston heads, all 4 cylinders. When I measured clearance on valves, I couldn't fit a 0.002 feeler gauge. So clearance appears to be way too tight.

Can someone give me some ideas what to look for? Or what else I should check. Click to view attachment Click to view attachmentClick to view attachmentClick to view attachment