Someone with more knowledge and experience will have to help you here. Low compression can be one (or a combination of) several things. The valves and rings (along with the head gasket) contain the compression. A valve job could very well bring the compression up, but you should determine if the lower than specs compression is a result of rings or valves. Squirt a tablespoon of motor oil into the cylinder and run another compression test. If the results are significant higher then it indicates that the rings are somewhat worn and the oil is temporarily sealing up the leaking. No significant difference and it would indicate the leaking is between the valve and seat. You should make a new posting with a "compression test help needed" subject line so someone can give you the fine points of conducting the test and diagnosing the results.

Addition things to have done when the head is off:

1. The machine shop should check for electrolysis damage. If the car hasn't had its antifreeze changed regularly electrolysis can damage the aluminum head creating cavities in the surface that can cause problems of sealing against the head gasket. These can be welded before any planing of the head is done.

2. Your turbo head doesn't have exhaust valve stem seals (because of the heat they endure). The guides need to be checked to see if they are worn. If they are worn they will allow oil to seep by and you get smoke- most often at initial startup (only a minor embarassment) but also possibly when down shifting or pulling away from a stop and idle period (slightly more embarassing).

3. Your intake valves do have seals and they need to be replaced.

4. They will remove the years of deposits that have built up on the under side of the valves.

5. They will resurface the valve seat (in the head) and resurface the valve face itself. They will then using lapping compound to help insure a good seal between these two surfaces.

6. They will grind a small amount of length from the valve to make up for the additional distance the valve extends into the head after completing #5.

7. They will check the head for plane. If it is OK they will take a small clean up cut on the head to give you a nice new surface to seal up with the head gasket. If it is warped they will remove enough (there are limits) to make it plane again. Volvo heads have a lot of tolerance to milling as there is little if any possibility of the valves contacting the head, but at some point the compression would be high enough that you might need to run aviation fuel in your new weekend warrior :- )

All of these acts of labor on the head should only be undertaken after a competent person has examined the head for damage. Overheating is bad for any head but especially aluminum ones. Warping can occur and cracks can form. Warping can be dealt with by milling, but cracks usually mean you need to post in the classifieds for a good B21FT head.

Randy