Why would they have needed to? The E58s had lower compression than the low-performance 360s and made more power, so why would losing compression in the 318s to gain power be a bad thing? No they didn't go all the way below 8:1 since they didn't use the thick gaskets that go in most rebuilds today, but they did get lower. In the later '70s it seems there were at least two chamber volume 360 heads- 318s got the smaller of the two like the low-performance 360s and the high-performance motors got the larger of the two. (like in the LREs and Super Coupes)
Sounds interesting, I'd be intrigued to see pics or even just get the cast number off them.
