Milling the head to gain compression would not be a good idea for this engine, they make aftermarket high compression pistons for a reason, and that would be your best bet. I believe a 10:1 would be a great hop up, otherwise 12:1, but then you have to run a race gas mix, and that can get expensive, plus it wouldnt last as long, but the 10:1 would run fine on premium from the pump. The major downfall is the shaft drive rear end - you will never be able to go faster top speed with motor mods, only get there quicker. The only was to gain faster top end is to run larger rear tires. The other downfall is the auto type clutch. You modify that engine enough, and the clutch wont be able to transfer the power, and start slipping.
THE 80's RAGE! Currently owns:
81, 85 Yamaha Tri Moto 125
83 Yamaha Tri Moto 200 x2
82,83 Yamaha Tri Moto 175 project
85 Yamaha Tri Z 250
84 Kawasaki Tecate 250
84 Honda ATC 70
85 Honda ATC 350X
84 Honda ATC 250R
(2) 84 Honda ATC 200x
82, 83 Honda ATC 185s
81 ATC 200
Lots of other parts and bikes