I have to agree, the best course of action here would be to stuff in the best low mileage engine you can find. To open that motor is an absolute can of worms. I cannot see how the could be responsible for having ONE hole go south on you. To register basically zero on the compression guage you are going to have to have on size large gaping hole in that #1 hole somewhere. Hole in piston, one bent valve(!?!), something pretty serious. I have had engines apart that had pie shaped chunks missing in the valves and they still made some compression. Fixing that engine will most likely cost more than a used engine but it will give you the chance to see what failed in it, which in the end may actually provide you with more questions than answers. Sorry to see you in such a tight spot.
Mark
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