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Need a bit more information, as it could be a number of things.
How much did you shave down the head?
How did you rework the valves - did you cut down the valve seats like most other cars or just cleaned them up?
Did you reset the VVTI, ie. engage the locking pin with the tape and compressed air procedure?
Where exactly was it leaking at the head - as this is pretty unusual for this generation unless it overheated or suffered some other catastrophic event - could have been a blown o-ring on the timing chain tensioner - as that can hemorrhage enough oil to look like a head leak,
Any difference between wet and dry compression tests? 160PSI is a little low after doing all that work.
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2002 Corolla S, 1.8L 1ZZ-FE VVT-i
2003 Matrix XRS, 1.8L 2ZZ-GE, VVTL-i (RIP)
2009 Matrix XRS, 2.4L 2AZ-FE VVT-i
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