That is an old engine. Remove the head and check for a ridge at the top of the ring travel. I will almost guarantee the head gasket is leaking near the exhaust valve, that is the hottest part of the engine.
Dark streaks radiating from the exhaust valve indicate a poor seal. The face of the intake valve and the seat could be worn because of dirty incoming air.

Thanks, I'll check it out.

It would be helpful to run a compression check if you have access to a compression guage. If the compression is in the
50-60 lb range then I would suspect a mechanical problem as mentioned in the above post. If the compression is in the 100 lb. range then most likely the coil is bad.