No evidence of water. I just pulled it apart. If I put timing to zero it won’t diesel. When I shut off. The compression test is probably not accurate. I agree super high. The mains all look good. That’s a plus I guess ha.With compression that high there is liquid in the cylinder. Head is warped so gasket is not sealing or cylinder is cracked and water is leaking in.
When the motor diesels, that's when motor runs in reverse just before it dies and sucks in water. The water can bend rods and break things
The bearing journals are not parallel and flat. Your machine shop stuck it to you pretty good
Right now I would suggest find a shop to do a total rebuild which can be verified it can do the job, or buy a reman from a place like Michigan motors