I've just been through this exact experience— even the same cylinder, #4! I ran air through the plug hole, as Jerry mentioned, and had air coming through the carb which told me the problem was on the intake valve, not the exhaust valve. It also meant that I didn't have a hole in the piston.
My valves moved fine, no sticking, and no bent pushrod to prevent the valve closing properly. So I tried soaking in Marvel mystery Oil for several days, but no luck and no compression still.
I pulled the head and found a broken valve guide on the #4 intake valve. I had planned on swapping this head onto my 261 eventually so this kind of sped things up, but means it will need a rebuild.
Hopefully yours is just a stuck valve that will loosen up with some MMO.
Good luck and keep us posted!
