Volvo: stumped...850 head job gone south, head gasket, deck height

Question
Okay, I've got a '94 850 turbo that blew a head gasket, warped the head enough to warrant finding another. had one shipped up from junkyard that had one burnt exhaust valve but it checked out straight at a local machine shop, so I had them fix it up...upon their suggestion i gave them the old head for parts and they ended up replacing two exhaust valves on the no. 2 cylinder and one intake; they cleaned it up nice and reseated all the valves and it looked good enough to me to slap back under the hood.  so that's what I did.  setting the timing proved simple enough; absolutely positive that there was nothing left in the cylinders before i put the head back on.  end result:  everything back together...turned the motor over and kerack! kerack! upon first firing...then runs rough for the half-minute I let it...pulled the plugs and the same no.2 cylinder revealed a giant hole in the top of the piston.  suspecting that I dropped a valve, the head came back off with both valve heads snapped off close to the end of the stem and M.I.A....but the stems remained snug in place, keepers, springs and all. lifters look good...head has several impressions from the stem nubs and doesn't look pretty at all...block is now highly in question as no.2 piston is in tatters--though the rod assembly seems tight--cylinder wall is somewhat scarred, and my wife is eagerly waiting to be unleashed on the machine shop guys in her quest for recompense...only a proper explanation for what happened in there eludes both the machinist(real nice guy) and me...any insights?
relevant supplementary info.:  i used the cam and lifters from the old head; checked the length of both valves from the old head and new and they were the same...
thanks, forrest

Answer
Forrest,
Where there any marks on #2 piston the first time the head was removed? Was the deck height measured? If no marks on the pistons and deck height was right, then the only way that a valve can hit a piston is when the valve timing is not correct.