VW says maximum compression pressure for your engine would be between 114-142PSI. Warm engine, all plugs out, full throttle, full battery, turn engine over with starter.
Your compression pressures do sound a little high, maybe the heads have been flycut/shaved to increase compression or to fix a problem. Or maybe they came from an engine that had a bigger cam in it and needed higher compression ratio.
To really know what you are dealing with, you should pull the heads off and measure a few things. Are you planning to go that far? Or are you just running some tests with teh engine installed in the car?
Do you have any driveability problems? Overheating, knocking, dieseling after shut-off?
What is the valve clearance set to?
You can install cylinder base shims to increase the deck height, to bring the compression down. That's the most common way anyways.
The BEST way is to optimize the deck height to 1.1-1.3mm and modify the cylinder head to achieve the volume you need, for the compression ratio you want.
Let me know how mechanically inclined and equipped you are, and I can tell you everything you ever needed to know about rebuilding and modifying these engines. I have built countless of them for race and street use, as well as stock rebuilds, for the past 20 years. These cars are my passion. I still have a 68, with a little overXXXXXengine, at around 150hp :)
If you pull the oil pump out, you can examine the end of the camshaft. If there are numbers stamped on the end of it, they would tell you what aftermarket cam it is. If it's blank, its' either a stock VW cam or possibly one that was reground to some other specs.
I should add that almost every compression test gauge will show different numbers, they aren't generally calibrated very well, if at all. :) The important thing is that all the cylinders are close to each other.
Your compression pressures are at the higher end of the spectrum even if your gauge read a little too high. Some stock engines show 150PSI on some gauges easily.
If you have no driveability issues, I wouldn't worry about it. These engines can stand more compression than stock. You can try to see if a tank of high octane makes the engine behave better, get rid of high load noise (pinging/detonation). Pinging is not always audible, but when it is it's at high throttle openings, low to mid rpms, high loads. It would sound like someone left pennies or keys in the engine and they are rattling around in there :)
Ahh so we are not talking about a stock engine here.
What carburation and intake are you running? and if you have the cam manufacturer name and grind number, I would like to see those too. I have the specs if you have the grind number.
The oil leak is pretty common. You can have oil weeping past the cylinder head and cylinder sealing surface (poor seal, loose head studs) or through the rocker assembly studs... those go through the heads and often leak oil through to the other side, where it would appear to leak from between the head and the cylinder.
If you want I can help you sort the carbs out and reduce that famous 009 stumble too.
Your idea for vacuum would not work. You can't take distributor advance vacuum from the intake manifold, it HAS to be taken from the carburator body, right where the throttle valve is. Also a vacuum "reservoir" won't work, the signal has to be instant coming on as well as going off. A reservor would leave it "hanging" until it was depleted, and possibly slow to respond until it was "full". Hmm. That's weird. How can anything be "full" of vacuum... lol but you get my point hopefully :D
If your carbs have a port for vacuum, you can use a vacuum advance distributor. But mind you, you need a distributor that has BOTH mechanical and vacuum mechanisms. Not just a vacuum distributor. What you need is referred to as an SVDA distributor (Single Vacuum, Dual Advance).
It will buy you much beter driveability and better fuel economy, and better throttle response. Better in every way than the 009. Your best source for one is www.aircooled.net ask for John Connolly, the owner, to explain it to you. You will need to tell him the application too, what kind of engine and carburator setup. He will then be able to choose the right model SVDA for you, already tweaked to suit your engine. Tell him Jan sent you :)
if you want to get the 009 working the best it can, I can walk you through but it will take a little more correspondence back and forth.
You may have dirt in the idle jet or idle passage on #1. Clean the carb real good, take the jet out and blow the passages clean with air - from a small distance, don't pressurize the passage.
Double check your valve clearance on #1.
I haven't worked on the HPMX carbs yet, I try to stay away from them after reading lots of negative feedback on the early batches of the carbs. The later batches may have had some improvements incorporated into them.
You can also further improve them by using genuine Weber add-ons or upgrades, I can tell you more if you want.
Mixture screws generally should be out 1.5 turns, and you choose the idle jets so this is possible. It's just a rule of thumb to get you close. If you have to turn the mixture screws out much more than 1.5 turns, it is an indication of too small idle jets.
Bigger idle jets would help with the off-idle stumble and flat spot. Idle jets are in play up to 2500rpms, not just at idle. Then you start using main jets and idles together, until the rpms climb higher and the main jets take care of most of the mixture and percentage of idle jet flow gets real small. At the high rpm range, air correction jets come into play more and more, taking part of the role of the main jets.
if you do take the head off, you have an opportunity to do some measuring and learn more about the engine. I would fabricate pieces of metal pipe or a plate that allows you to clamp the cylinder down against teh case, imitating a cylinder head. Then you can accurately measure deck height, which would be VERY nice to know, letting you calculate the compression ratio. You would also need to measure the volume of the combustion chamber, cylinder bore and stroke. (Bore you can read from the top of the piston, should be stamped there).
Make your cylinder clamp downs in such a way that you can lay a metal straight edge across teh two adjacent cylinders, to check that the tops of the cylinders are exactly level with each other. One cannot be sitting higher than the other, or you will have sealing problems and head warping.
Before removing the head, go ahead and check the head nut torque on all 8. It's usually the lower 4 that get loose, being in consrtant oil bath more or less.
On reassembly, remember to replace the o-rings on the rocker studs before putting the rocker assembly back on. Use sealant under the washers on the lower 4 head studs. These are common places for oil leaks in the area you describe, looks like it's coming from between the cylinder and the head.
If the head to cylinder mating surface looks iffy, you can use valve grinding compound to lap the cylinders into the heads a little. Do it on both cylinders on one head so they remain even. No gasket, but you can use a very thin coat of some high temp sealant. I use Mahle cylinder sealant but people in the know recommend Yamabond or Hondabond too, from Yamaha or Honda motorcycle dealers. Aviation permatex has also been mentioned. RTV Silicone is not a good sealant here. I would only use it between the cylinder and the case, in place of the paper gasket. It has no other place in a VW engine because it's too thick for most purposes. (I don't use it at all)
I mentioned the Weber update kit earlier, here's a link to it:
That SHOULD also work with the HPMX knock-offs. I am not 100% sure, so you should try to confirm it before buying.