I would not go bombing around without checking for a bad head gasket.

In 2001 we bought a used '95 954 that had been leased for two leases. In 2004 my wife noticed that it was running rough after getting off the highway after a 15 mile trip. Since she was right near our dealer, she drove in.

They looked at the car and told her not to drive it.

Upon evaluation, the verdict was a blown head gasket. Nothing bad had happened to the car, such as overheating, etc.

When the head was removed, it was found that part of the head gasket had corroded away! The car had 97k on it.

Since I had lurked this board for a while, I had obtained an aftermarket insurance policy (only a manufacturer can issue a warrantee) - they paid $1800 to repair the car. We only had 1000 miles left on the policy!!!

The car had never lost any coolant of note - it was losing a tiny bit as the cylinder and piston in the affected cylinder was clean as a whistle.
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'96 855R,'64 PV544 driver, '67 P1800 basket case, '95 855, '95 854, the first three are mine, heh, heh, 485,000 miles put on 9 bricks

What are your driving habits? 87k, I've got about 2.5x more miles than you on the same car. If you're only driving it 5-6k/yr then you could have serious carbon buildup on the valves. The seafoam should have cleaned it up, but driving it hot will work better. Do the italian tune-up like Klaus recommended, then try compression again. It should be better warm too, why was the battery dead?
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If you're not driving it "like its stolen," are you really driving?

By all means, get a leak down test. With the compression only rising 20psi with oil, it does sound like a bad valve or 2. All compression reading should be done on a warm engine for best results.

A reconditioned head for $450 is not a bad idea. Normally, the rings last for ever in these engines. A non-firing piston will have gasoline wash all of the oil out of the rings and cause some compression loss.

What "I" would do is to blow out the carbon in a short drive. This engine has relatively low mileage and a valve could have a gummed up seat causing the non closure. A good run at 3-5K rpm for 10 minutes usually removes valve deposits. Just remember to bring your phone with you!! I can get to 80mph in 2nd gear, so watch out for the cops.

This isn't the same 850 you had in 2005, is it? With the leaking antifreeze? If it is, it probably has a bad head gasket.

Klaus
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Always willing to listen, just not able to take direction.