To reduce the compression all we needed to do was take off a part of the head that made it smaller in the 350 stock configuration. This was done with a dremel and including washing the head it took under 40 minutes. I then decided because we had the head out and the engine has 20k km on it to also change the valve guides and the valves themselves - which are very cheap here, the entire package costs just little over 5 euros. After another 30 mins the head was re-assembled with new valve guides and valves and all of it did cost me 40 euros. Can't beat that! Compression now is 170 psi (down from 200) and knocking has disappeared. 170 was what we measured on the stock new classic bullet.
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