Stepped piston hitting head, options and advice needed.

Decking the block isn't the problem #1 .070 #3 .070 #5 .098 #7 .099 Now this is with me giving the benefit of doubt and keeping all the decimal point in the same place............ If that deck jumps from .070 to .098 from cyl 3 to 5..........coolant would just port out out at that point.

All the piston domes should be EXACTLY the same height(from "wrist pin" to dome)

O.P. just need to spend some more time using the tool and getting use to it.
check a piston.....remove tool and then set it up to check that same piston. When you get the same Number Three time. You now know how crucial the "setup" is and are now ready to check the next piston.
I'm not scolding, just trying to help. Every one has a learning curve when it's the first time using a tool that can measure in .001 (1000s of a inch)
Go back out and play with it. Have some fun with it! U will get it.:)
The Bridge suggested above is easier to use but a dial indicator on a mag base is just as accurate............Just requires a little bit more set up time.....To be accurate.