I do not have the answer to the original question but I think I understand what you are asking.
You would like to know how much to mill the heads to increase the compression ratio to the point where you have to run higher octane fuel to keep it from detonating (aka spark knock / aka pinging). As I understand it, this is usually a quick and inexpensive way to increase engine HP on water cooled engines like a small block V8. I don't think air cooled engines respond as well to this trick due to the limited cooling capacity of the air cooled engine design. Increasing the compression ratio increases ignition temperature. The valve in block design is also fighting you. Its design is also inefficient compared to an overhead valve engine like a small block V8. I think the flat head engine design responds better to increase air flow work of bigger cam/larger valves/ carb work/exhaust work than a bump in compression ratio.
You are also starting with a twin cylinder M18. These engines do not seem to be the choice for hot rodding. I'm not sure why - maybe because they already have 18HP and great torque from the twin cylinder design? Maybe they are too heavy in the wrong places for a pulling setup?
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