I bought a differential compression tester, so spent the evening testing each cylinder. This is what I got:
#1 = 80/70 #2 = 80/70 #3 = 80/50 #4 = 80/75
When I first tested #3 I got 80/20. At TDC there was air coming out of the carb (AeroInjector). I worked the prop around a few times, and then back and forth through TDC. I completely loosened the rocker arm to the intake valve to make sure it was not holding the valve open. I eventually got a consistent 80/50, but that's still well below the suggested 80/60 minimum.
I have not run the engine yet. I'm wondering if I should run the engine as-is and see if the valve seats better. Maybe it needs to rotate?
I emailed Kerry this weekend so won't hear anything back for a few days.
Update: Actually, I heard from Kerry early on Sunday morning! His response was...
It is certainly worth running the engine and then doing another compressions check. We have seen many aircraft engines (all flavors, on all types of aircraft) exhibit failing compression when cold but turn good when warmed up. This is especially true if the aircraft has had an extended period of inactivity.
Blue Skies, Kerry Fores
Guages here show 0/0. I didn't have the air turned on during the photo.