Question: Do you have a really thick base gasket ???
That would raise the Cylinder and cause the excessive squish....I've seen some quads where the owner cut their own gaskets but used waaaay too thick gasket material.
Also an Incorrect spacer plate (if you're running an '86 Piston with the '87-89 long rod) would do this aswell.
You could try a CR250 head gasket they're only 0.020" thick.