So i got around to performing the "poor mans" leak down test. At first i could not find any air escaping while inducing about 100 psi to the cylinder. So i turned the engine over and tried again. Low and behold i could feel the air escaping from the dip stick tube. If i hold my finger over the tube it escapes from the valve cover. So i guess this means the rings in the #4 cylinder are shot. Is there anyhing else that could cause this?
Rings are never a perfect seal, there is always some blow by, so this test is always subjective. Did you test any of the other cylinders to compare the amount of air they pass?
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If air is coming out the dipstick it's a pretty sure bet you've got a broken ring
It could be a broken or worn rings, hole/crack in a piston, blown head gasket between the cylinder and crankcase, etc.
... if air is coming out the valve cover then either a valve is leaking or you dont have it at TDC on the compression stroke with both valves closed ...
Nope, valve cover equals crankcase. If an intake valve is leaking, the air will escape out of the intake/carb, exhaust valve leak out the exhaust system. The big problem is hearing/detecting them, these systems have bends, mufflers, etc that mute the leak sound. On the intake the best bet is to remove the air cleaner, open the throttle plates and listen close.
Have you checked the valve adjustment? This can help in finding the problem, if a valve tight it will be held slightly open, causing the compression loss. If a valve adjustment is way loose, it probably stuck and maybe able to be worked loose. If a valve is way loose don't try to adjust it, attempt to work it loose first.
What is the history on the motor, has it been stored? What your describing is common on motors that have sat without running for a while. Some moisture gets into a cylinder, causes some surface rust on the rings and/or a valve stem, sticking them. Most of the time this can be freed up without taking the motor apart.