Hello
If I understand this correctly the valves will close once the rocker arms are released, removing the bolts. The valve springs will close the valves. If you tighten them and lets say the head has lost a quarter inch of material the head, once torqued down will compress the rocker and hold the valve open enough to cause a compression release (both valves open at the same time, extreme overlap) which will cause a loss of compression. If all the associated parts are the same with the exception of the "shaved head" and "replacement head gasket" then something is wrong with these parts.
You also have to keep in mind the valve timing which is the location of the crankshaft, camshaft etc, upon reassembly. I'm assuming that you used the correct alignment?
Also, did a timing belt break which created this job or was there too much slack in the chain if equipped? If the engine was running and the drive connection failed the valves could have been bent by the pistons making ever so slightly contact with them, that would also cause the compression loss.
Make sure you covered these areas before going any further.
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