are you sure the valves are completely closed when you do this test? Is it hard to remove the cam to be sure the valves are seating?
After you redo the test (if needed) I would definetly take it to a different shop, these heads should last quite a while and 35k isnt that.
Some shops still knurl the guides for a tighter clearance, which doesnt last long at all and in my oppinion is totally hack.
95 E34 530I V2.37
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