Am I ok with this? KB107 in La block

To be fair, maybe at the time the machine shop felt that square-decking wasn't worth the expense based on the intended usage. OR they don't have as much experience with Mopars which are a lot worse with variations in deck heights than Chevy and Ford stuff. When I took my 440 block to be machined I mentioned square-decking and the shop owner said he could do it but it would cost a lot more and not really be worth it; at the time I intended to build it up for my D200 pickup with only ~9:1 compression to tow my Duster around and be safe on regular gas.
I mean ZERO offense to the OP, but his method of measurement leaves much to be desired. I'd almost bet that's where the issue is. At least I hope so.