Considering the available headgaskets are .050-.055 compressed,that means a piston coming out of the block .010 at TDC.A lot of pro engine builders shy away from this on a street engine.
Detroit Gasket used to have a .038 gasket for the 261. Don't know if you can still get one.
Tighter quench is usually better,but almost all the info you see on it is for common wedge shaped V-8 heads,the 235-261 head is not one of these.To know for sure would be to build and test two engines identical except for the quench and see in real life if there is any actual performance difference.
