I did some playing on the compression calculator, i was unaware of the needs of a "quench". Here are the numbers i used to get a .038:
4.030 Bore
3.750 Stroke
54cc Head Volume
+5cc Flat Top Volume
.010 Deck Clearance
.028 Compressed Gasket Thickness
I came out with 12:68:1 compression

Is .038" quench what i should be shooting for? Is there anyway to get a "good" quench but stay closer to 12:1 compression?

 

heres something lloyd wrote me when i asked about compression ratio in the lt1.

LT1's WANT and NEED compression to run well.

Stock LT1's have 10.4 to 1. To make them run, we use a thin head gasket and mill the heads .035-.040" to get around 11.5 to 1 and a built 355 will like 12 to 1 compression. Aluminum heads, reverse cooling, etc all take heat away from heads and chamber so we need to run more compression and take advantage of this.

Do you need to pass an emissions "sniff test"?

What is the weight, gear and stall?

The 223/230 will seem milder in a 383 but if you have to pass emissions, we can't go any larger. If you do not need to pass emissions, the 383 will want a 230/238 cam to have the same drivability, power band, etc. The extra cubes just want 6-8 degrees more duration to be comparable to what a cam acts like in a 350/355.

The 383 may have better rods, pistons, etc so it can live longer at a high RPM also so if you have the gear, stall, etc, you might even wanna go bigger.

If going with the same cam for emissions, get a -10 to -12 cc piston and Fel pro 1074 head gasket to end up at 11.4-11.6 to 1. If you do not need to pass emissions and are using a larger cam like a 236/244 .608/.608 110 LSA, get a -5 cc flat top and run 12.0-12.3 to 1 compression. Lots of people doing this on 92/93 octane pump gas.

The engine builders that are used to old school SB Chevys with carbs and cast iron heads are talking people into building there LT1 with only 10.5 to 1 compression but these guys are never happy with the way the cars runs.

 

You need to use thicker head gaskets, because of the high c.r. and the dangerously small quench area those are giving you. You really need to know what you're doing, and get the engine tolerances just so, to be able to get away with a quench of .040, or even a hair less. Seasoned hi performance engine builders can do it, but assemble your engine in the garage that way and expect the pistons to whack the heads when you wind it out. Piston to wall clearance is an important factor, have it even slightly looser than optimum, and the piston will rock enough to hit the head. A good number of builders will recommend a quench of .050, but definitely more than .040. See what c.r. numbers you come up as well when using a thicker gasket.

 

A bunch of guys over at ls1lt1 tech told me my quench should be .030 - .040, so i really have no idea what i should shoot for

 

lol, those "experts" eh? Are they going to guarantee your engine and fix it for you too? Do some research online about quench, or better yet, talk to some engine builders about it.
And I mean real "builders", not slap-togetherers.
Here's a good article to get you started: Piston Head Clearance Guide - Tech Article - Chevy High Performance Magazine