Not sure if this was said before but try to borrow another compression tester and see if it's different otherwise yes it could just be wore out.
Unless you have a dyno or a big test tank you can't re-creat that.
I'm assuming you looked at this......
https://www.marineengine.com/parts/johnson-evinrude-accessories/index.php?year=1983&model=Power+Tilt%2FTrim+1983§ion=Power+Tilt+Kit+25-35+Electric&yid=34152&mid=34157&sid=37038
Grease doesn't go into the tube....it goes around the outside of the tube and around the bushing.
They do make upgrades, a stainless tube and a nut with a grease fitting in it so you can periodically grease inside the tube.
Replace it.
As to why it fried.....I wouldn't know.
I looked up your part and it's pretty pricy so you may want to do more testing of the other components.
I know less about that.
Here is a video of the simple test of a 3 wire rectifier. Remember a rectifier just changes ac energy from the stator to DC current.
This is just testing the diodes but it usually shows the signs of a bad one. There are more complex tests online but watching this simple test gets your feet wet...
Others have said before because your not using a stock omc key. I'm sure people will pipe in shortly.
You might have to lap the flywheel and are you using a torque wrench to tighten the nut?
Most of the engine parts you can buy OEM new in lots of places, if your looking for the steering tube, clamps.....t&t then I would try to find a parts motor.
Ate yours corroded out or what's up?