Nightmist66,
Don't want to alarm you but the flywheel I have is a Ford Racing Billet Steel FMS-M-6375-P428. It's got about 20K miles or so on it with a few drag races under it's belt. But, the point is, the guy that did the grinding on the flywheel for me said he took almost .040 off it to get it right again. He even left a portion of the flywheel unground past the pressure plate mounting bolts. The place he left unground was where I set "0" on my indicator and his "high point" opposite "my 0" was .010" too low. So, if nothing else, I know this flywheel was warped .030" anyway. This is a 29LB hunk of steel billet that I didn't think was suppose to fold up like a cheap cardboard box from Ford Racing.

Yep, knew that, the old one reads 2.380".

I need to apologize to you guys for starting a post when I didn't know what I was talking about. The engine I thought I had isn't the engine I've got now. After cleaning up everything and measuring it I think I'll still be OK using .020 head gaskets.
What I've got. A 105 block in which the level of the deck is within .001 using a Starrett straight edge ruler mounted on a indicator base (magnetic).
 H395P +.030 pistons ( 9 cc dish from what I can find information on) which set .030 below the deck.
C1AE heads that should cc out to 71-74cc's of dish (heads are still at machinist).
From all measurements taken I should end up with a .050" quench, 9.57 - 9.85 SCR, 7.9 - 8.1 DCR.
 I also spoke to Stan Johnson about the FPA headers I have fitting the C1AE heads, he said it would. Now I've just got to confirm the "S" code 390 intake will seal on the C1AE heads. Thanks for your patience.

One last comment, I know you know how to calculate DCR because you do it often, but overlap doesn't affect DCR, although the diluted mixture from overlap could reduce detonation at low RPM I suppose.  Did you mean you swapped to a intake closing point of 61 degrees?  61 degrees of overlap for the RPM you run would be a relatively healthy cam.

Ross,
 61 is the degrees my intake and exhaust is open at the same time. 71 degrees is my intake closing angle. I had designed the engine to go into a 63 Galaxie Boxtop to resemble a "B" code 63. I found most of the components before I found the car. I was just going to drag race it. When I changed my mind about drag racing it I needed a different cam. Lunati designed this one for me so I could run on pump gas. 282/296, 214/224 @50, 114/110, .500/.500 lift. It was a 1.73 ratio and 0.00 lash designed cam.

What will help the driveability and the health of the motor the most would be to get a thinner gasket or have the decks cut.  Having over .060" of quench distance is not conducive to a happy engine.

You know, you're right. I just got through figuring how much more money in gas it would cost me a year to go from a 7.8 DCR to a 8.2 DCR. About $150 dollars a year. What the hell was I thinking. I'm going to call the guy doing my heads and tell him to put the big valves in the C1AE heads and I'll go with the .020 shim gaskets I already have laying on the shelf. I've run a .020 gasket on my 406 for 3 years now and not had any trouble with them. That'll give me a @ .044 quench and 8.2 DCR at 10.0 - 1 compression. Thanks for waking me up.

Update:
   Just to let you guys know, the engine is back together. I noticed one thing this time that was different from the first time I put it together, the intake bolts dropped right into place and tightened by finger without moving the intake around to get the bolts in. Have no idea how it lasted for 20K miles like it was, but it did. I can rev the engine now without making smoke. It still has 17 inches manifold pressure and the gauge still acts the same as before. Taught me a lesson. Thanks again everyone. I'd never have thought the vacuum gauge wouldn't have indicated a vacuum leak.

I would skip the RTV altogether.....

Use the Right Stuff, TA-31, Dow-Corning silicone, or similar.  Put a small smear around every port on the heads, lay the gaskets down, then set the intake on it and let it sit overnight.  Go back the next day, smear some more on the gasket around the ports, lay your beads down for the end gaskets, then set the intake on, start the bolts, set the distributor (make sure intake is centered around it), then tighten her down.

When I said RTV I meant "The Right Stuff". I called NAPA earlier today and they had two calk containers of it. They laid one back for me. I'll do it like you suggest. One more day after all this isn't going to hurt me. Thanks, Jim