Was the compression test repeated after "injecting a liberal supply of engine on top of the pistons with low reading cylinders"? (quoting from the shop manual.) If the compression comes up to near normal, worn rings would be the suspected cause.
Was the compression gauge a screw-in or hold-in with a rubber seal? I recall some gauges that did not seal too well with the small sparkplugs in most 216s. Of course, a leaky gauge is usually obvious, and the readings are usually erratic.
I've conducted at least 100 compression tests on stovebolts (216, 235, and 261), and I do not recall ever seeing readings that low on an otherwise good running engine. Did pulling out the throttle knob really open the throttle to near full open? Was the choke wide open? I would usually open the throttle wide open by hand and lock it open with a visegrip or have a "helper" push the pedal to the floor.
As long as it runs well and does not burn a lot oil, I would not worry much, if at all.
Hoyt
