Alex

from my experience of OS spec II(3 of them), once you have pited the head and piston top even though you polish it will still blown plug and have irregular idling. But your one doesnt look too bad.

Head shims wise .2mm is fine for us with 16% and you should you use 7 plug. make sure you leave bottom end needle flush with the housing TZ dont like bottom end lean at all(leave it alone) depends on what pipe you are using top end needle is about 1.75-2 turns out from fully close.

1 last thing you are using Magnesium head so it take much longer time to warm up, so dont touch any needle until engine has some temp in it.

come and see me on Sunday I will try tune it for you. btw make sure clutch is set probably!

Tom