85 psi is low, the fact that you only picked up 3 psi on a wet test tells me the valves are in need of work. Those engines came with very small port(peanut port) heads. If I were going thru this effort, I'd pull the heads(you're almost all the way there as is). And figure out what combustion chamber heads you have. Id try to find smaller chamber heads to get that compression up(you probably realistically have around 7-1). There are numerous different heads available(OEM and aftermarket) that will help that engine a bunch. Once you get the heads figured out, get the cam to work with those heads. I'd top it off with the Performer intake and Q-jet