Lack of compression could be due to a few reasons, some of which are more significant than others. The valves could be out of adjustment, failing to properly seat at the appropriate point in the compression cycle. Adjusting the valves would be step one for this. The 2F / 3FE engines tend to behave poorly if the valves are not adjusted properly. They tend to run rough, but I'm not sure that poorly adjusted valves would get you 40 or 60 PSI on a compression test. That sounds more serious. The next possibility is that there is something wrong with the cam/pushrods/rockers that would cause the valves to not seat properly. Lobes rounded off, badly worn rockers or bent/worn pushrods. Usually if the valve timing mechanisms are messed up, there were serious oiling problems. The valve seats could be worn or the valves themselves could be burned (exhaust side), but again, those are less likely and more serious issues.
The next place to look for compression problems is the rings. Usually if you squirt some oil into the cylinder before running the compression check, if the rings are the issue, the oil will seal them up temporarily and result in an improved compression result. Rings tend to wear out pretty evenly across cylinders, so unless the compression rings in the two bad holes broke, you'd more likely see lame compression across most cylinders, but not down at the 40 - 60 PSI range (that's really low) in just a couple of them.
Far less likely, but still possible, are burned thru pistons. Usually only an issue in high performance turbo situations, so unlikely to be the issue.
I'm sure others on the forum will offer up some great suggestions as well.
If the truck is otherwise pristine, and you can get a good deal, and you're mechanically inclined/handy, I'd suggest that you grab the truck and deal with then engine issue(s). Rust will haunt you forever, and IMHO engine repairs are much easier and less stressful than trying to put the tin worm back in the genie bottle. YMMV.
Welcome aboard!
