After some prep work with the starter and carburetor, plus fixing the battery tray and making a new fuel line, I was able to finally crank this thing over until I almost got it to run, almost!... BUT after a while, I was almost done with the battery and also knew from the sound of the engine cranking over that I had bigger problems...
Today I got a hold of a compression tester and confirmed my worse fears... After running the test a couple of times I got the following...
#1 60 lbs
#2 00 lbs
#3 20 lbs
#4 90 lbs
#5 15 lbs
#6 90 lbs
So, despite the mystery oil treatment and diesel fuel, I have 3 cylinders with a great problem... I have decided to remove the cylinder head, oil pan and pull the pistons out... I am sure that the rings on #2 #3 and #5 must be still stuck to the pistons, some partially, some fully or perhaps even broken...
With any luck I hope to remove the stuck rings and replace them with a new set of STD rings after cleaning the cylinders with a hone... Then I will re-assemble everything and hope to get it running this way. It may not be ideal, but the whole machine shop/professional rebuild is not an option at the moment...
A real shame that the damage to this engine seems to come from just being left to the elements for 35 years... I was sure I could get it to run after freeing it up, but that would have been too easy! I will tackle it Monday and see what other surprises we have... Still, I am determined to get this thing running before going for plan B.