My first clue was the black sooty plugs. Some one already addressed over rich fuel. Check the carburetion first. I don't know what those carb numbers given were, but if the cfm is too large, you could be combatting that.
Also, it is assumed that the engine has a fair amount of miles on it. One could also assume that the valves and guides are loose and the valve seals are no longer performing their job. This would allow excessive oil to contaminate the cylinder and create a "sooty" problem. That excessive oil could also give an inaccurate compression test. Like HotRodLincoln suggested, a leak down test would help to determine some problems quickly.
