Alright, so the culprit in my engines issues turned out to be a worn out oil pump. There was almost no oiling to the head nor to the lifters and camshaft. Amazingly nothing happened to the cylinders nor the head itself. What did happen is that one of the lifters ground one of the camshaft lobes and the lifter stop opening the valve. That's the reason of the misfire.
To solve this, I decided to do a full rebuild. My mechanic took the engine out and we found that obviously the camshaft bearings had been honed by the camshaft so those have to be changed as well.
Obviously we checked the pistons for problems and found none. Being out I am having new rings installed, along with main bearings and rod bearings.
I could not find standard size piston rings for the B20 anywhere in the usual places, IPD, Swedish Treasures, etc. But I found them in an online outlet called Redlinemotive.com so I ordered this kit and its on its way: 1974 Volvo 140 Goetze Piston Ring Set (GOE-A2050-77648) They were not cheap at $132 for four.
I bought standard size camshaft bearings, rod bearings and main bearings, along with a full gasket kit, and an HD oil pump from IPD. The oil pump is backordered which is holding up the order thus the rebuild. But it should be sent by 7/10 I hope.
I also took advantage of having the engine out to properly repaint the engine bay (what parts that were not able to be painted in the first go).
I am also having what gaskets can be changed while the engine is out from the BW35 transmission as it leaks even after rebuilding. Though I am hopeful that I can get all of my conversion to manual parts very very soon. The BW35 was rebuilt and works fine. I expect to sell it and get something out of it for another lucky Volvo owner out there.
I bought the IPD D Grind cam kit altogether with lifters and push rods. I had installed a rebuilt D-Jet head in my car (which came with a K-Jet), for higher compression. I wanted the full kit with camshaft bearings, but IPD is out of camshaft bearings so I bought those bearings from Swedish Treasures.