Quote: My 71 Demon has a 225 that I have completely tuned up and adjusted. I have no way of telling how many miles it may have on it. I recently put in an oil pressure gauge. When hot, the oil pressure runs from 12psi at idle to 50psi above 1500rpm.
Not too bad. You will want to service the oil pressure relief valve to make sure it's doing its job, as described in these two threads: thread 1, thread 2.
Quote: This motor uses about 1 quart of oil per tank of gas.
That's grossly excessive oil consumption. What type of oil are you using? Did you install new spark plug tube seals when you tuned up the engine? Is your PCV system working completely correctly? Are ya sure?
Quote: It does not smoke except sometimes when it is cold.
What kind (colour) of smoke, and how much, when cold? You'd have giant clouds of thick blue smoke following you wherever you drove, cold or warm, if you were burning enough oil to need a quart per gas fill-up. It's gotta be leaking.
Quote: There are no detectable leaks of fluid.
Ah, but there may well be some undetectable ones. There are many points from which oil can drip while you're driving, without creating a telltale oily mess. You may want to try a closer inspection by cleaning the engine thoroughly with engine degreaser, adding UV-fluorescent dye to the oil, driving for half a tank of fuel, then shining a UV light all over the engine. Even the smallest evidence of a leak will shine brilliant yellow under the UV light. See here and here for more info.
Quote: I have considered rebuilding the head as I believe the valve stems may be at fault.
You're right to hesitate. Putting a nice tight head over a worn-but-working bottom end will often finish off the bottom end and turn the engine into a giant oil burner.
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Overheat once and it became a skeeter fogger!