Gary, this is the typical cut you see when the N20 spray is ignited by a hot spot in your chamber. My guess is the plug electrode was glowing and turned your spray into a cutting torch. See the nice cut pattern on the head and stem.... Your ex valves looked like they have been running close a while, you are lucky that the #3 didn't beat the cylinder, head and piston to death, it probably cut like the #4 and hit the piston just right and went out the open hole.
Turn up the fuel pressure, on the jets you were using I'll bet you were on the lean side for extended spray time. You didn't mention your N20 pressures so it is hard to know if your plan is high pressure (gaseous) or low pressure (liquid). But generally if you spray a long time, the bottle gets cold and you spray liquid, (read more weight, leaner mixture) always good to plan for that. If you are using regular plugs, change to retracted gap when you are spraying for a long time they eliminate the potential hot spot.
Scott, turn up your fuel pressure also, most of the suggested numbers for the kits are for drag racing, they are too lean for LSR, your motor might live on the edge for 10 seconds, but not for 20...
My longest spray time was 58 seconds, 9+ lbs. of N20.