What valve clearance do you recommend?
By the sound of it, i need to check the idle jets and air fuel mixture. I think the Carburetors are too big for the engine. It seems to run rich.
To do a compression check I need to warm the engine and then remove the spark plugs?
It depends. Aluminum pushrods: .004" intake and .006" exhaust. Chromoly steel pushrods: "loose zero" i.e.: 0.001" clearance, or you can just spin the pushrod with your finger ICE COLD engine.
Chromoly pushrods don't expand much, but the engine does, hence it will gain clearance engine warm. Aluminum pushrods expand at the same rate as the engine, so they tend to maintain the clearance set when cold.
Yes, compression check warm.
Your engine specs might help us to help you: displacement, cam, rocker ratio, carbs(including jet sizes) and exhaust, and heads(valve sizes). Spark plugs too, and ignition system(which distributor, points/points eliminator). Ignition timing set at?