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When you had the valve cover off, did you check or adjust the valve clearances? If you didn't, I would suggest you take the cover back off and do so. I suspect you will find there is no free play whatsoever on the exhaust valve in cylinder number 1. This would be due to the seat receding into the head, which happens when 72 and earlier B20s, which don't have hardened valve seats, are run on unleaded gas for any length of time. The cure consists of removing the head, having a machine shop install hardened seats (and new valves) and putting the head back on. If you are lucky, the old head will not be so badly worn that it is unusable. If it's too far gone, you will need a replacement head. Note that heads from 74 and 75 (and maybe some 73s) came from the factory with hardened seats, so they will require no additional machine work if in usable condition to begin with.
If valve recession is indeed the problem, you should be able to pull the head in a couple of hours (manifold nuts can be difficult---soak them repeatedly with PB Blaster for a couple of days before you start work) and putting it back on is not much more difficult. You will need a head gasket set and a torque wrench for reassembly, which you should be able to accomplish in an afternoon.
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