i think this was answered on the other thread, and i agree, sounds like buggered heads to me. BTW, those 305 stock heads are KILLING that engine! not enough flow, can't handle the lift, valves are too shrouded............., i could go on, but your buddy needs to trashcan those heads, and go with a set of good flowing factory or aftermarket heads. i think doc already said that, too.
the reason it quits after it is warm is that the clearances tighten up, and when revving, a large enough low pressure area is built in the bowl to pull oil through the guides. solution..... BETTER HEADS!!
that cam probably doesn't start making power 'till, what, 3500+ rpm? max out somewhere past 7500? stock heads (with a few exceptions) die after 5000 - 5500 rpm. your first post was the closest. listen to everyone else here, they said all this before i did, and take your own advice also - replace the heads.