Compression is compression. It escapes somewhere. Either past the rings, past the gasket or past the valves (or through the block or head, if there are cracks).
So...first, how did you test the compression? All the plugs should be pulled, the throttle should be held wide open and the engine should be turned over for an equal number of times per cylinder, 7-8 is usually sufficent. You can also watch to gauge to make sure it stops rising.
Then, other than absolute numbers, look for how they compare to each other. There are too many variables in engine age, gauge calibration, user error ect, to really stick with a published spec. 120-135 is the area you want to be in for most common compression ratio engines. Cylinders within 5% or so of each other is usually considered OK, although Haynes says variances over 30psi for the v6 are unacceptable. Personally, I would be pretty unhappy with a cylinder that was 30psi lower than the others. You might get away with as much as 10%, but in the end, your engine is running so it is no big deal and I would not tear apart an engine for the numbers you posted. Run it until it is noticeable.
If you did not test compression as I described above, do it again. Actually, do it again anyway and put a bit of oil (a few Tbs) into the low cylinder. If it comes up, it can be assumed to be a ring problem. If not, then valves (or gasket or other) can be considered.
Yes, your valve lash can affect compression, but you have hydraulic lifters and are technically running zero clearance on the lash. The only way to keep a valve open would be to adjust it to the point of compressing the lifter completely, then a bit more.
As for your observations on that plug, low compression means less efficient combustion and/or oil into the combustion chamber. So it is not a case of running rich (more than one plug would be affected) or not firing (you would know it from how it runs.
For goodness sake, get the thing timed correctly. By ear is great if you really know what you are doing, but I would not trust it for this engine (like Ed said), or any engine when timing lights are cheap and the process is easy. At the least, fab up a pointer, set it to 0* TDC and then scribe marks on the harmonic balancer. Just measure the diameter and figure the circumference. Circumference/360 will give you distance for each degree. Mark off 12 or 13 degrees BTDC and set it to that. Take it for a few WOT runs after it is good and warm and if it pings, back it off a bit. If not, advance it a bit.
Or, you can just pony up and get a pointer from the GM dealer. <img src="/forums/images/graemlins/smile.gif" alt="" />
Good Luck,
Michael
