I tried to respond earlier to your question, but the potty filter blocked me (I looked as hard as I could and darned if I could find an even marginally offensive word in it -- go figger!).
Retarding a spark (it may still be advanced BTDC, but not far enough) delays the combustion to the point that the valves open before the combusting fuel is done expanding, and it finishes burning and expends the rest of its energy in the upper part of the head. The net effect is that you have energy(heat) that has not been converted to motion. It thus remains as heat and overheats the head and can be pronounced enough to boil an engine over.
It is a new rebuild, so it's fairly safe to eliminate glowing carbon as a cause, as well as burrs. Since you've said the motor has been heated up, I'd suggest warming it up again, set the high and low idles as well as the load mixture, shut it down, retorque the head, run the valves, and see how it behaves.
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Today's Featured Article - Show Coverage: Godfrey, Illinois Country Days - by Cindy Ladage. Except for last fourth of July's Old Gold show in Springfield, Illinois, I don't remember when it was so hot. Nevertheless, the heat didn't keep vendors and visitors alike from enjoying the third annual Country Day's Event. Jane Elliott said the event was originally a one man show. "Barry Seiler, owner of Country Town Farm Supply store used to invite people up to the Johne Deere store. He would give hats and a free meal for everyone that brings a tractor." Elliott said while this
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