The bung in the servo take off on the manifold could be suspect too. They're usually threaded right the way through and sealed with a soft washer under a conventional hex head setscrew (5/8 unf). It'd be nothing like as bad a leak as the open breather pipe & could be sealed with some sort of thread sealant.
The 295 head will give low compression, if it's around standard volume with dished pistons. Can't see any reason why it wouldn't run though, a more open throttle would let it fill as well. Haven't done the sums, but I bet it wouldn't be far off a standard 998 with flat tops - worth looking at though as you'll be losing much of the potential gains. If the machine shop is half competent they should have measured it to at least restore the head volume to original from what they ground off. It's fairly common practice to stamp or engrave such info on the top somewhere.
