you guys are leading me in the right direction... I checked secondchance garage and they had a nice adobe flash display of different vacuum gauge scenarios. The scenario they showed that came very close to matching my reading was indeed indicating a valve not closing all the way. Almost a valve overlap it said. Which would make sense. When I removed the spark plug from #5, it was the worst, almost 3 times worse, than all of the others. It is the one in the video where the tip had just about "welded" to the electrode. Cylinder 5 was also the one that had the least amount of heat when compared to all other cylinders exhaust temps.
Next time I am in the garage I will take the valve cover off and check #5 intake and see where we are at. I did adjust the valves before I put the engine back in the car, so who knows? I may have adjusted #5 intake too tight... If it is not #5 then I will do a compression check on all cylinders. Last time I did this I was at 155 for all 8, with very little variance from that number. That was some time ago however.
I will let you know how it turns out. Thanks for the advice guys.
Daniel JessupLancaster, California
aka "The Hot Rod Reverend" 
check out the 1955 Ford Fairlane build at www.hotrodreverend.com