Thanks for that, I guess to start I will re test cylinder No 3 with oil and see where that takes me.
i've seen a fair few valves get cracked or burnt out on them,, mostly a indication of other issues causing it in first place like injector gone wonky or wrong spark plugs or spark plug of coil pack problem very rarely,, worth after repairing do run injection cleaner through it.
that all said some just crack,
you will need head off if were you and repairing it put new chain kit in it as old one will be spent for sure or very close to it. eitherway you need to remove head , but i would before doing so do that trick with oil in the bore and compression test as when head off harder to prove rings good or bad with out further strip down ie sump off and piston out,, the oil will temp seal worn piston rings to give a reading if rings,, if no change then proves more likely its within the upper part of engine,
another test can do when head off is put some diesel small amount in number 3 cylinder with engine oil drained hour before and sump plug out , so pour diesel in and then watch the sump plug hole for any diesel running out,, if instantly get it running then rings have worn out, on a very good engine could leave it in there for days and loose none,, i also use seafoam inlet spray on the pistons and let soak in and down to the rings as this loosens the crud that can hold rings off the bores on some, i also use it to clean head with scotchbrite pads ie inlet ports carbon and all surfaces,, once clean and ready to install head just before put head on i clean both head and block with thinners or panel wipe head this helps the gasket coating to stick its self to the surfaces