Is this a blown head gasket ?

That's the tightest spec I have ever heard of.
My KB107 equipped 367 ran very hot and locked up every time I shut it off. I tried everything. Finally I took the engine apart and reset the gaps from .0065 ring factor, to .008 and all was good. The LD at the new gaps was barely measurable on my small gauge.
At 4.04 bore, that is .032(top ring only) Some ended up a lil more.
I added a couple of thou to the second rings, from .0065 factor.
Car still went 93 in the Eighth at 3467 pounds, so I was happy.
It never locked up ever again, nor does the temp ever go over 207 anymore.. I can't even make it get hotter, unless I cover the 48 year old radiator.
I get that the hypers are a special case but;
IDK man .016 seems extremely small.
In your case, I would call the manufacturer.....

These are iCon forged pistons . That was their instructions . But I would feel more comfy at .020.