Thanks all.
To answer NHRABill's questions re. mileage and prior care:
I bought the car at 150K miles and it's now at 218K. When I got it the oil was dirty and even after a change it would be blackish again within a couple hundred miles. Also it would take 1-2 hours for oil to drain into crankcase so I could get a consistent dipstick reading. I deduced the drain passages were pretty well clogged.
I used at least three things in the oil at different times to clean the innards and now it drains within moments. Any oil added in the top shows up immediately on the stick, not as before. Also the oil doesn't go blackish with use, but it does darken normally after 2-3 thousand miles.
So my mechanic friend reports:
Lousy compression in Cyl. #2, which does NOT improve when adding oil via spark plug hole. So there's a head/valve problem.
The shop has a small video camera on a long gooseneck that can be used to observe the interior of the cylinder. Slick, huh!! One valve (underside) showed heavy whitish deposits from oil coming down the valve stem and burning while oil was coated onto valve. That would be a burned valve. Top (seat) side of valve isn't really visible but the damage is there. One of the four valves was invisible due to the cylinder configuration. But it's pretty wild you can see anything in there without taking it apart!
The remaining question is, are there also bad rings or are they OK? I don't think we want to do a whole rebuild but wifey might go for a top end rebuild. I'm going to have to pay somebody, I'm not up to the job.
For the rings: This weekend I plan to test for weak rings by putting a few ounces of light oil in each via spark plug hole. Note crankshaft position and measure depth of oil in each with a straw for a dipstick. Make notes of the depths. Then later, check all cylinders for draindown. If any are really bad I should see some differences between cylinders. I can also crank the engine with a wrench to work the rings a bit. Not like running the engine but I should see some differences between cylinders if any have really bad rings. If there are bad rings I might have to ditch the whole thing. Not worth our $$ to replace the whole engine with a questionable used one.
That's my story and I'm sticking to it. I'll post again after I complete the proposed rings draindown test.