I just did a compression test on it with the engine warm. #1-175 #2-165 #3-170 #4-165
I also did an air hold on each cylinder with 125lbs of shop air. No sounds of leaking at all and no bubbles in the radiator.
I went out for a test drive after that and it seemed to run great....when I got back home and put it in park the idle started surging from 800 to about 1200 and when I put it back in drive or park the idle went to just a touch over 1000 and held steady.

When I had the head off I had removed a housing on the back of the head near the dist. It has 3 ports that go against the head that appear to be coolant passages, one had a semi-plugged screen that I cleaned while it was off. It also has what appears to be a solenoid..one wire to it, and what appears to be a temp sensor. I can't find its name in my haynes manual or find any pics of it online. Does it have anything to do with controlling idle?