So I went down to the machine shop today. They got the heads off and as expected #8 piston is done. Cylinder didn't look too bad aside from a couple of minor dings that can probably be machined out.
The #8 exhaust valve broke while the motor was running. As to why it broke we don't yet know. He hadn't yet gotten the rotating assembly out yet so hopefully I'll hear from him tomorrow and have more answers.
The one thing we do know is that for some reason cylinders 1, 3 and 5 have marks on them that suggest the intake valve face contacting the tops of the pistons slightly...as if to stamp their imprint through the carbon layer on the top of the piston. I bought the heads off of eBay so I'm assuming they didn't come off of the same motor and one of them may very well have been milled at some point in its life. Another possibility that someone else mentioned is that the timing gear crank key may have sheared and started this whole mess.
Anyway...here are the pics.
Damaged #8 piston with exhaust valve head sitting on top of it
If you look at the color of the top of the piston you can see that the fuel mixture looks damn near perfect, and the carb is bone stock.