Custom valve seat installation question

I am putting some ductile iron valve seats into a antique cast iron OHV V-twin (not Harley) motorcycle engine. This will never be a high milage bike, more of a hanger queen, but I want to do it correctly. The original seats were integral to the head and not able to be cleaned up. The valve seat counterbores were cut true, flat and concentric to the valves guides. Due to the rather steep odd hemisphere of the combustion chamber, the now oversized seats cannot fit fully flush all the way around the counterbore. My question is whether to:
1) Cut the new seat so that it sits flush in the counterbore at its deepest and then blend the proud/portruding edge to be flush with the chamber. A PITA, but can do it.
2) Cut the seat so that it sits flush to the shallowest part of the counterbore and allow part of the seat to be recessed into the counterbore. And what would be an allowable tolerance depth for the recess?
Seems alot of the valve seat diagrams show a slightly recessed seat. Thanks.

When I was working on motorcycle heads, I really got the messed up ones and I know exactly what you are referring to. All I can say is I tried to make the best compromise I could, having to consider the installed valve height that is within 1/32" on old Harleys.
I always tried to get the seat under the aluminum, and take a 1/2" ball fine cut burr running slow in a die grinder, then work down/blend the taller shrouding around the seat.
As usual, old motorcycle heads are warped, so I always had to face them flat, that usually took care of any added volume from blending in the replacement seat.

This might be helpful,
If the hole for the new seat is machined, a gage can be made of a metal sleeve that will slide into the hole, and have a 45 degree bevel, similar to the seat. With that you can accurately determine the exact height the valve head needs to be in relation to the seat.
With that info, the seat thickness can be determined.
Taking it further, this is what I did, I quickly cut a new valve seat insert to the right height, and was able to cut the basic valve contact angles on the seat with it in a lathe. I used Martin wells valve seats, buying them in the less costly generic sizes.

+ 1 on what Donie wrote.

What one of my old bosses used to call ''tart it up a bit to make it look like we tried our best''

The grind / cut your seat and lap the valve to it for a gas seal - and call it good - chances are the original builders did little more.

Oh yes - If you're in ANY doubt DON'T forget to check valve piston clearances (playdoh / modelling clay / putty etc etc)

The old Harley Shovelheads, were perhaps the worst motorcycle heads ever made, the needed extra Tarting!

Some of the Villiers (mainly the last when they knew they were for the chop) 2 stroke barrels were atrocious - to the point you wondered how the engines even ran.

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What i have seen is bore the head so they are flush then grind the combustion chamber back to clear a flow path

If it is not high performance the flow path is kinda not all that important

Donie, I was planning on making a gage exactly as you described, thanks for confirming the idea. I have to confess that I have the original heads, usable, but lots of broken fins, badly pitted. I acquired these repops (unmachined, rough!!!) almost 30 yrs ago. I will assume from a tiny batch, by folks that really didn't know what they were doing. The metallurgy is good, no voids, but critical dimensions... let's say they didn't give me a lot of meat to work with. But they are coming along and look to be salvageable. Looking at that Lotus page, I don't feel so bad.