There are all kinds of home-brew treatments and all kinds of possible reasons.
most likely culprits in no particular order:
- stuck rings
- rusted cylinders
- collapsed/damaged lifters/followers
- stuck valves not closing
In the case of the first two, pull the plugs and put something in; penetrating oil, marvel mystery oil, random motor oil, ATF, whatever. Let it sit overnight. Leaving the plugs out, crank it to get excess out, then do another compression test. If the compression is higher, it's a ring seal issue either due to stuck rings (pretty common) or cylinder rust. In both cases, drive the crap out of it with as much WOT as possible.
In the case of the last two, that can be difficult to diagnose. If you can get a little machinist's ruler down beside the valve springs, rotate by hand and make sure they all have the same travel. I'm not familiar with that valvetrain so I don't know if it's shimmed solid followers or hydraulic. If that is your problem, you might have luck with some SeaFoam (which might be a good idea anyway). Get a can of seafoam, pull off a vacuum line, and stick it in the can. Then rev the engine several times like a kid revving his car at a stoplight. You'll probably see all kinds of nasty stuff come out the tailpipe.
Then you can do an oil flush if you want with one of several liquids. The old school trick was to add a quart of diesel to the oil and idle it for 20 minutes. Drain and refill. There are motor flush products that are $8 a quart that smell alot like diesel. I advise against ATF. It won't hurt anything, but it won't clean anything either. People assume that ATF is this wonderful, high-detergent stuff because they pull apart a transmission and everything is so clean. ATF actually has less detergent than engine oil. The reason a transmission is so clean inside is because it doesn't have to deal with a tenth of the junk that combustion gives to engine oil, not because of detergent.
Whatever you use, make it volatile but not overly flammable. Make sure it evaporates at the temps the oil sees. That way, (since you can never get it all out) the trace amounts will evaporate before doing any damage. For instance, don't use Acetone or paint thinner. It will boil at too low a temp and not only froth the oil (loss of oil pressure and damage) but acetone gasses boiling out of your oil vent is a recipe for big booms. For this reason I either use diesel or one of the motor flush products. You can use SeaFoam in the oil as a flush, it's just expensive and not sure it works any better than diesel.
If you use an over the counter flush, just follow directions. If you use diesel, don't rev it or drive it. Dump in a quart of diesel, idle it for 20 minutes, drain and refill.