"It has already been squared/leveled."

Apparently it hasn't been squared/leveled enough to get a good squish. You are the owner of the parts. You can do with them as you wish, but if they were mine, I'd make certain everything was right before I began screwing bolts and nuts together. What's the compression height on your pistons? A good 350 piston should be at 1.560+. If the pistons are at that, I'd cut the block decks to zero. If the pistons are short, getting the correct pistons would put you a little closer. I personally wouldn't mind so much being at 0.050" with aluminum heads, but that's where I'd draw the line. All top builders will tell you the same thing.....0.035" to 0.045". David Vizard currently uses 0.035" and I don't think there is anyone on the planet who has more dyno time on small block Chevies than he does.