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very interesting
The chain skipping is seeming more likely now. If it moved that much somehow you could of bent some valves would easily explain the zero compression (as opposed to a HG failure).
I would definetly pull the head at this point. A little word of advice somtimes the heads take a lot of muscle to free em from the headgasket (block). I had to use my cherry picker to pull my brothers head off (that sounds funny) it wouldnt budge otherwise. Lil pressure and a plastic hammer and it came off.
Pull the oil pan as well (you'll want to anyways to get the front cover back on properly). Will give you a good look at the crank, bearings, pistons etc.
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1987 Pickup, single cab, 22R, new head, 260 cam
TG 3" SAS, rear disc brakes, chromoly rear axles, Chromoly Birfs, Tcase brake, 37x12.50R15 MT/Rs, 5.29 gears, rear Aussie Locker, front Detroit Truetrac.
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