I am coming in on this late, and may have missed something. I did just install a used 2.3 in my wife's Isuzu pup. I got terrible compression readings and freaked. I had spent $1200 plus on the engine. I called the company, they said the engine had sat for years, and I ought to just try starting it. I did and it started on the first try, and purred like a kitten. The reasoning the tech suggested was the rings were stuck and would loosen up after firing.
So here is my question, aside from the symptoms, have you tried to start the engine?

Brian Rodgers
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1989 Isuzu Pup gasser
2-86 Isuzu Trooper turbo diesels (1 good 1 bad)
Many gallons of biodiesel since 2005