noob needs help with mileage - only 10 MPG!

rmchrgr,
What my mechanic had to say was very similar to what you wrote above.
He said that the high leak down percentages are probably due to worn rings and/or valves, but that he can't be sure without taking the head off.

Yes he can know without taking the head off. BillGrissom is on the money here.

Before you pull the head, find out where the leak is coming from. Apply air thru the spark hole to each cylinder at TDC-compression stroke. Listen at exhaust pipe, carb throat, and valve cover. Since a solid-lifter engine, it could be as simple as the valves need adjusting since being held open by the cam.

I did this on my engine. I took the fitting from a Harbor Freight compression tester and screwed on an air compressor hose fitting. Make sure the valves are closed on the cylinder in question and give it some air, but not too much to turn over the engine. On mine I could hear air at the tail pipe from one cylinder which told me I have a bad exhaust valve on that cylinder.

Another simple trick is to add oil to the cylinder. If the compression improves with oil, it points to rings.

Leaky rings means an engine rebuild and big dollars. Leaky valves means a head rebuild and less dollars (or maybe just adjusting the valves). Bad compression between two adjacent cylinders means a head gasket and you get off cheap.

Either way you should adjust the valves. Too easy to eliminate that possiblity.