Todd,
I've always read that having the ignition source (spark plug) in the hottest area of the combustion chamber(over the exhaust valve)is the preferred location. After ignition, it is desired to have the flame front proceed towards cooler surfaces, thereby reducing the probability of autoignition, then detonation of the pre-combusted mixture. In the K301, .040 off the head raises the compression ratio one full value (from 6.5 to 7.5:1). In a K321 with larger bore, this same .040 will raise the ratio a bit higher, probably (guess) closer to 8:1. In an L-head engine, there is a fine line on balancing breathing ability (volumetric efficiency) with compression ratio. Too much off the head and the "trench" becomes restrictive, negating any benefits that the higher CR might contribute. My recommendation, especially if you're burning gasoline (vs. alcohol) would be to stick with the K321 head with .040 to .050 off the surface.
I can't really advise you on cam selection. I've never degreed a K361 cam, but I did check out the one I bought through Madson's. Lift is stock at .312 to .315 but more overlap and duration than the stock K301 cam. Most noticeable is the lift rate (valve acceleration) is quite a bit higher on both inlet and exhaust. You can hear this when the engine runs - it has more valve noise than a stocker. It's not objectionable, you only hear it at idle, and I've grown to like it. Has that tweaked-on hint about it.
I'm honored that your following my build-up. Please post some pictures as you proceed, so we can all see your progress.