You can look at the pistons and rings by taking the By-Pass covers off. Each cover has 4 bolts. Once the cover is off, you can gently push on the rings to see if you have some movement. If not, then the ring is frozen in the groove.
Worn cylinder and rings seems to be the most common reason for low compression.
Seen a few where the motor was over-heated and the rings were seized in the grooves. Freeing the rings up helped a little bit but no dramatic increase in compression. Ended up at minimum, replacing rings and pistons to restore compression. Depends on what condition the cylinder walls are in so it also may need a re-bore with over size pistons/rings. I suspect that once the ring freezes up, and the motor is run for an extended amount of time, it wears the ring and/or the cylinder wall out of round so you can never get a good seal.
Like Red stated.....Make sure your compression gauge is accurate.
