Thanks all for the comments. Sorry it's taken so long for me to respond... I have been away from the forum for a while and I didn't see the activity on this thread.
As for the bike - I completed a rebuild using J&E 11:1 1216 pistons. When I pulled the head off and tested the valves by pouring gasoline into the pockets, two of the exhaust valves had mild leaks (cyls #3 and #4). That wasn't enough to explain the low compression. The machine shop where I had the head rebuilt told me that one of the valve guides was very loose on cylinder 3, and they thought that what was probably happening was that the valve wasn't returning to the valve seat with any reliability - therefore, compression in cyl #3 was low. I don't know what would cause one valve guide to wear to this degree, but not the other guides...
The shop installed a new valve guide and a new valve as a replacement. The machinist said that the remaining exhaust valve guides were all loose, but would be "good enough" until the next head refresh.
The pistons, rings, and cylinder walls were in good shape. Still, this was a good opportunity to install the 1216 pistons, so I went ahead and did it. It was a real pain to get the rings compressed and the pistons installed.
I have 5,500 on the rebuilt motor now. It runs very strong. Oil consumption is approximately 1 quart every 3,000 miles, which is more than I would like. Hopefully it will go down, but as this is a very hot running air cooled motor, it may not. I think some of the oil is volatilizing.