Before condemning the engine inards, consider doing a compression test, leakdown test and then another compression test with a "squirt of oil" into the cylinder and compare results.
Glad to hear that you are closing in on the problem. Please report back after you take care of the valves. BTW: I also have a 1 GM (not the 1GM10). It's been a good engine so far.Pulled the head. What a mess. Replacing valves and valve springs. Should then be good to go.