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.