Thanks guys! Good to see your fingers aren't so frozen that you can't type. Or perhaps the whole family is gathered around the monitor to keep warm? :p
Okay, a few comments based on what you all have said...
The carbon build up on valve one and two is uneven, and white edges, whereas the others are just evenly coated. Any significance?
In pic 5, it looks like there might have been a leak around the bolt? It shows up better on the valves pic. The head gasket looks intact.
Yes, we did discuss getting pics with the pistons all up, but the timing chain is stuck at the moment so there's not too much movement. It would have taken too long to resolve adn the camera was burning a hole in my hand.
Valve 3 is the one leaking, but it also had the highest compression.

Could be multiple problems going on I suppose.
A valve adjustment was done while it was still in the car, and it didn't have a noticeable improvement (still very rough idle). However, upon dismantling of hte car hubby discovered the EGR valve was completely stuck. I think he had to use a vice to get it to move (interesting you mention the EGR valve Randy). So, maybe there were multiple problems going on.
Tony, your comments so very encouraging!
I'll keep you posted once we get some measurements.