DemonRunner

Bought another 4Runner on Craiglist to build up and play with, its a 85 with a 22re 5speed with 139,000 miles not bad shape.Came with new parts but not put on, 2 inch lift leaf springs with bushings from Northwest, new rotors ,calipers,wheel cylinders,wheel bearings for front and rear and seals , knuckle rebuild kit , new master cylinder , new timing chain cover ,BFG's AT's tires and a Centerforce 2 clutch both with less than 2000 miles on them. The owner said he drove it for a while it ran strong then it started blowing oil everywhere (which i see no evidence of oil in the exhaust pipe or engine bay)and he had checked and it had zero compression on #4 cylinder so he parked it and looked for another motor, it sat for period of time and then he decided to sell it .I bought it and hauled it home.Here is what I have found so far .I ran a compression test and got the following.
#1 145
#2 50
#3 45
#4 120

I believe its the head gasket, gone between #2 and #3 , Would that be the first thing to go for change the head gasket?
Thanks for any help