Just a data point as to how bad it can get, years ago, when I purchased my first airplane (1957 C-172), I learned a lot. The purchase was from a family acquaintance, who was an A&P. Known the guy for a long time. Airplane came with a fresh annual, so no pre buy (lesson #1). Long story short, we had many issue with the airplane and decided to do a mid year inspection. Compression test yielded 68, 20, 0, 40, 0, 20 (O-300).A leak down test is the method specified in AC 43.13 and is especially helpful in determining where the pressure loss is occurring. Pulling a cylinder if it isn't above 60/80 as Lycoming long recommended (Service Instruction No. 1191A) may be unnecessary, expensive, and potentially cause bearing problems if the torque isn't done correctly on re-install. Continental published a service bulletin (SB03-3) addressing low results in compression tests. They have data showing 100% of rated horsepower produced by test engines with leak down readings in the low 40s. The main thrust of their SB is to identify the source of the leakage via sound and verify valve condition via borescope. If it is valves, something needs to be done, but moderate ring leakage doesn't keep an engine from making power, though the oil consumption is likely to be high. A dynamic or pump up test comes closer to showing if a cylinder is unusable because of ring leakage. Compression, combustion, and power will happen fast enough that leakage you would see in a differential pressure test may be pretty much moot. If it will pump up to some reasonable value, and if it's similar to the opposing cylinder, operating the engine is probably safe.
Ed
Decided to rebuild the engine early, it was mid-high time. Sent the cylinders to Gibson. Get a call back saying the bad news is three cylinders are cracked and can't be welded. The good news was that three cylinders were cracked but could be welded.
We had flown the airplane based on an A&P owner's sign off which was obviously pencil whipped. (lesson #2)
Point of the story is that the engine still ran, even with those abysmal numbers...
Lesson #3 was that you should always be willing to walk away from a purchase.
