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7 1/4 Rearend (I haven't checked personally, but I read that 3.23 gears were the standard ratio for 1960 7 1/4 rearends). Can anyone confirm?
Available ratios in the 7¼" rear in '60 were 3.23, 3.55, 3.91. But, are you quite certain you've got a 7¼" rear axle? I'm away from my office (and manuals) right now, but I am fairly certain the 7¼" was used only in the Valiant in '60, with the larger cars (e.g. Dart) getting an early 8¼" design that is of no relation to the familiar '73+ 8¼".
You're getting good feedback already in this thread. I'm curious: What's your overall goal for the car? How do you intend to use it? Reason I ask is that if you're not trying for high-RPM zoot, there's little reason to put in oversize valves. The stock-size valves are plenty adequate for mild builds, and their relatively small size improves low-RPM engine characteristics by keeping port gas velocities up. Increasing the compression a little is a fine idea, but be careful not to go too high, or you'll get pinging and have to buy expensive high-test gasoline. The "twin breathing" in and out (Offy 5041 and Dutra Duals) should make a nice combo that is period-correct for the car. Pay careful attention to the distributor advance curve, because a lot of power, driveability and economy can be found by making sure this is just right. Think carefully about camshaft selection; it's very easy to buy too much camshaft and kill your low-end torque and economy in exchange for high-RPM breathing you'll never use. Me, I distrust the Comp 252° cam, and I like the 244° Mopar Performance cam (no longer available from Mopar, but Doctor Dodge's cam guy can grind it). DD also has done extensive experimentation with cam grinds and so is a good guy to talk to about a cam for your particular purpose.
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Since I have the motor out, should I go ahead and bore the cylinders?
As has been advised: Check their condition carefully. You may need anything from just a light surface hone to break the glaze, to an overbore.
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What about rearend gear ratios? I mostly drive this around town on a regular basis, but a few time a month I drive it to work, which is a 40 mile highway drive, one way. Currently, it's a chore to keep it at 55/65 on the highway.
Please explain. What makes it a "chore"? These cars in the stock configuration don't have a problem keeping up with traffic at 75 mph once they reach that speed, unless something is the matter. Optimal final-drive gear selection is dependent on several factors, not least of which is tire size.
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I talked to my mechanic and he said the head work would be no problem.
Careful there, too. Porting is more an art than a science. I certainly don't know how to do it beyond just easy/obvious cleanup of casting lines. It's easy to do more harm than good with a die grinder!
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Should I have any cylinder work done ahead of time so that he can determine how much to mill off the head?
Well, you'll want to measure the combustion chamber volume on the actual head you'll be using, so that you can determine how much to mill off the head (or, maybe preferably, the block!) to attain your desired compression ratio. There's no magic number, because the CC volume varies greatly from head to head. If you are going to put the effort and money into building up a head, see if you can without too much hassle start with a '68-'74 head, which has a somewhat better-shaped combustion chamber. The difference is minor, though, so don't feel you have to go to great lengths to do so.
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Also, I believe at one time I saw a chart, here, that told how much to mill the head based on cylinder bore and the compression that you wanted to have. I tried a search but couldn't find. Anybody recall this?
See above, such charts are useless because of CC volume variation.
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