I don't know exactly how you performed your testing but there are a few more things you can do to pin point your problem. Look here under "Examples"

How to do compression test?

 

Your compression test should be done wide open throttle on a warm engine, and compression under those conditions should be around 170 minimum. With the one bad reading, did you then put oil into the plug hole to see if compression came up, which would indicate ring leaking. All info in the link listed above.

 

Even if the compression tests were not done correctly, assuming the same procedure was followed for all four cylinders, the variance between #2 and the remaining three cylinders is excessive and points to a problem with that cylinder.

I would suggest repeating the tests and make sure a "wet" test is done - the #2 problem could be valves, a defective head gasket, or a cracked block/head (a leak down test will provide more information), and once you have a more accurate picture you can make an informed decision, but, I believe a rebuild is in order.

 

There is a dig difference in cyl #2 compression compared to the others.
Pour a LITTLE engine oil thru the spark plug hole just before repeating the compression test.
If this makes compression go higher then the leak is caused by bad piston rings.
If not your leak is elsewhere: head gasket, head, valves, seats, etc.
I think your engine can still be repaired.

 

gota love no profile and no motor spec, nice. (not) 2000 year, I4 2L DOHC motor , wild guess?
weve posted like 10,000 times how to do a compression test... sigh.
warm to hot , W.O.T , all sparks out.

#2 is DOA. I dont think oil will save it, YMMV

x2 above, and do a leakdown. using a leakdown tester if you need more proof of DOA.
i dont.

you could do a RAD leak down test and see if the gasket is failing (or worse)

at this point where the pressure is going is unknown.
me i follow the book that came with my eng. cyl. leak down tester. ( can send Amazon link to same)


1: shop air conn. with LD tool or welded on nipple to a shelled outspark plug. (omg , free tools almost,same too for valve seal swap head on.)
2: TDC #1 cyl ,exactly so i can bump.
3: now listen to Intake plenum ( (rubber hose to ear) all intake valve leaks. (manif. off ,is better , surely)?
4: listen to all exh ports, ah #2 is way bad. (manif . tied back)?
5: listen to oil filler cap hole and dip stick tube hole , hare rings leak.?

that leak test tool is amazing.
you could take of water pump and do that to the jackets. but most don't. (but i do, because pressure testing a block is very expensive and labor max)
it's amazing what you can do with $2 nipple and shop air.

in 87' , Tom Wilson taught me that, Thanks TOM !