possible piston to head contact.

Closed chamber heads with the early 340's are usually a no go. The KB's I run on the '68 340 in my Duster came out to be exactly .018" over the deck, with no deck surfacing at all. I ended up having a set of open chamber 308's ported for it. Late now, but Edelbrock makes a special version of its aluminum heads specifically for the early 340's. They're opened up to 65cc's and have enough clearance for the .018" above the deck pistons that are the norm for the earlier 340's.

The thicker head gasket should solve the issue, but of course it will lower your compression ratio too. Assuming of course that you haven't hurt anything important with that contact.