I have never done a leak down test before... extremely logical suggestion. Tool shop was closed for the day before I had a chance to go grab a tester.
New development: A buddy came over and I was showing him what the inside looks like and I had him spin the motor by hand to watch the valves open and close. The exhaust valves are not in sync. It looks like one is seating all the way into the head but the other does not go as flush. I've attached a pic I snapped with the borescope. The pic is using a 90 mirror looking down (small amount of oil sitting in the bottom of the cylinder) and the two exhaust valves. The one toward the top of the image is not seated flush like the one on the bottom of the image. If one of the exhaust valves is not seating all the way, could that be a broken valve spring? Any other thoughts?