Pretty much what Cliff described the short block is how I built my 70 RAIII.
I used old style TRW flat tops and as they come out of the box they are only .015" in the hole or there about. I then deck the block near zero. Think I left mine .004 or .005" in the hole and with a .039" gasket I end up with decent quench. Compression was 10.13:1 on mine with the #12 heads.
For me adjustable valve train is a must so I can set lifter preload to what I want or what the lifter manufacture recommends. Making them adjustable is a piece of cake. I simply swap over to big block chevy 7/16 rocker studs and the appropriate poly lock to fit. This also provides a little more valve train stability with the larger studs. I do it with every Pontiac here regardless of cam or spring pressure choices.
On cam I wouldn't hesitate to run something in the low 220's @.050 and the Crower 60916 is one of those choices I'd look at for an engine like this. I run the 068 only because I want to conform to a certain rules package. If it weren't for that I'd be looking at something else. I can tell you everything has to be spot on to run pump gas with this cam.
If you're really stuck with pistons .040" in the hole (that just makes me cringe) and you really don't want to make the valvetrain adjustable, then I'd just stick with an 068, call it done, and hope it doesn't have wonky tuning issues and pump gas problems with the horrible quench.
Here's how my bone stocker runs after paying attention to the little details, lots of tuning, and a 3850 race weight, 91 pump gas and a 3.31 gear.
https://youtu.be/er1z7PpqsnY