I don't have any hands-on experience hopping up a K-jet motor, but my impression is that it adapts very easily to a wide range of applications. No reason I can't think of that raising CR would bother it in the least. Same for a hotter cam -- the K-cam was used as a compromise between power and emissions, not because the system couldn't accommodate more airflow.

Lee Cordner (VCOA Prez) has a *very* cleanly done K-jet 122... big-bore with D cam and a fair amount of head work, I believe, and it goes pretty well -- effortlessly outran my former B20E/SU setup at Thunderhill a few years back (that's no longer a possibility, I do believe). Here's a pic of him about to lap me: