Is the seepage acceptable: Well, not for me! If you are blowing some coolant by when under higher loads, I think it is only a matter of time before the gasket will fail.
I don't suggest torque any higher than your 64ftlbs. I
never go over 60ftlbs unless I know the threads in the block are very good. With higher compression heads, I have noticed from the dyno runs I put new engines through, seepage from the composite gaskets is common until a couple heat cycles. I have found that if I use clear water for the first 4-5 heat cycles and then clear water for 500 to 1000 miles of operation the gasket will seal very well. If antifreeze is used during the setting of the gasket, and it seeps, it will never seal and may weep when put under heavy load. Just my experience. The antifreeze inhibits the bonding of the gasket to the clean metal surfaces.
Comment: I have driven a Lion 111 head shaved .074" to provide about 7.5:1 compression about 20,000 miles. With a higher compression head (your Lion 7:1), it is very important to avoid lugging the engine. With all that extra power you will likely be able to pull that long hill without shifting to a lower gear but the head gasket is taking a beating while climbing that hill. A combination of the extra load and higher temp will eventually cause failure. I know it will for me. I carry two spare head gaskets while on any road trips over 6,000 miles.
Another issue you may be having and not know it is the tendency for a higher compression head to be sensitive to pre-ignition and too much spark advance. Both of these conditions will shorten your head gaskets life along with the bearings of the motor. On the (4) Lion Speed Head 111's I have installed for myself and customers, I relieved the sharp edges within the combustion chambers by hand with emery cloth. The first head I installed without modification had problems with pre-ignition when pushed hard. The issue in all of the heads was eliminated after creating a small radius on the edges. On my own modified Lion head, I also undercut the chamber wall surrounding the intakes to increase flow as you will see in the photo below.
Second photo: Lion Speed Head III on the dyno
Third photo: New test/break-in stand
Good Day!
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