Although i have a gen 2 3S-GE sitting in my garage, I haven't actually checked if it has a knock sensor or not. I would say that it doesn't, but my word isn't gospel. If you run higher compression, provided it doesn't ping then you might get a tiny tiny percentage of performance increase (noting of course, that your cam timing will be slightly out).
Also I doubt that you will be able to take much off the head, as the valves usually run quite close to the edges of the combustion chamber roof. I'd take some metal off the block instead.
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