Dead hole. What’s the next step
Take the rocker gear off the side with the low-compression cylinder. pressurize a Known good cylinder to 80 psi, but stand clear of the fan when you do, because the pressure will blast the piston to the bottom of the cylinder.
Ok now with a mallet, give each valve a lil bop, right on the end of the stem, and straight down; and listen very carefully to the sound it makes. Repeat it several times to burn it in your brain. Also, take note of how it feels when you bop it. The air pressure in the good hole will drive the valve and mallet right back at you, making a beautiful loud popping sound.
Ok now go do the same on the bad cylinder. and note the difference. Keep bopping them until the sound changes. Then continue on the one that is changing.
Why?
Well, in my experience, RUST, or carbon loosened by time, can form on the sealing parts of the valve or the seat, thus keeping the valve from sealing. If this happens in a running engine, already installed, the cure used to be to go out and blow the carbon out of it by a high-speed run, which would usually cure it. But not always, and so , then you were stuck lifting the heavy head over the fender.
But you, having been smart, already found this problem, before ever installing it. So bopping the valve stems is a quick and easy way to let the valve springs crush whatever is in there, and the air pressure will blow it out, and inform you when the job is done. Or not,lol
There is still a chance , as others have said, that there is other damage, But you will find that out in a few minutes once you get to bopping..
BTW using this method with the rocker gear removed, puts the piston at the bottom, so you cannot bend a valve during the bopping. But should the air pressure fail to drive the piston down, you better do it manually by turning the damper; just make sure to not have any air hooked up, while you are doing that, so you don't get maimed.. Furthermore, don't wail on the stems!, just bopping them a few to several thousands of an inch should get it done, if it's gonna get done.
Be advised that any time you shut an engine off, there are always some valves open, and the most open one will have a twin halfway around in the firing order. With a F.O. of 1843/6572 , just count of 4 cylinders and go and check your compression test results, for a low number on that one. If you find that, then it's probably prudent to bop that one too. So to be clear, if you have a bad #8, go check #5. If #2, then check #3. etc