Re: Compression test results - now what?
You can do a leakdown test, and it's a good idea. Do it, and you'll know where it's leaking. If you've got ZERO compression, I'll bet you a buck it's a bad valve, but it's easy to figure out. You can just blow compressed air into the dead cylinders (through the spark plug hole) and listen to where it comes out. No fancy equipment necessary.
The next step is to pull the head, and see what's up. If it's just the head that's got issues, there's no reason to go buying another engine (junkyard or rebuilt). Just pull the head, find out what's wrong, and go from there.
If it does in fact need a rebuild, the gaskets aren't really that expensive. I just rebuilt and marinized a junk yard SBC 350 with Summit Racing parts.
The gasket set was $40, and included ALL gaskets (including a Fel-Pro composite head gasket set) as well as, main seals, valve seals, etc... Here's a similar set for your engine, for $53 (a little more than mine was, but still damn reasonable)
http://store.summitracing.com/partd...840131+4294819503+4294925237+115&autoview=sku
Rings were $20.
The brass plugs were another $16.
Spent another $40 or so because I busted a head bolt, and bought a new bolt set and a replacement head gasket at Autozone.
Oh, and the engine cost me $69.99 at the salvage yard... It was a GM Goodwrench Crate motor. When I opened it up, the cross-hatching was still untouched, which lead me to believe that the engine was not yet broken in. I'd already bought the gasket kit with new rings, for dirt cheap, so I went ahead and re-honed it, and replaced the rings while I had it torn down... It was a truck engine, so I didn't bother with the cam. If I have problems, the cam will be easy to upgrade later.
All told, I put about $189.99 in it, if you don't count all the oil and filters and other incidentals that you'll need whether you rebuild or buy new.
$190 is a FAR cry from $1000+.
I did all the work in 4 evenings in a friend's garage (had to borrow his, cause I don't have one). The hardest part was finding the time to drive the 40 miles up there to work on it. I probably spent more money on gas to drive up there, than I did on the whole engine!