The Z heads have been used on 1000's of engines. I have them on the 347 stroker in my 66 Mustang with no problem. I also have the 427w that you have in my cobra, but have not run it enough to know if I have a similar problem. My carb is running so rich right now, that I'm not going anywhere for awhile. From what you describe, I doubt the rings are upside down. It does sound more like a head issue, potentially valve seals, but if so much
oil is being pumped into the heads with small drain back holes, I guess that could be the problem also.