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Well, yes, but it's toasted on the valves, soo they need to come out, and probably be edged again, but that's kind of a pain, and I don't know how... >_>
What that means, though, is that the smuck could be preventing the exhaust valve from fully closing, soo that would explain the loss in compression. (wich in turn explains the loss in power)
Also, some of the smuck got on the sparkplug, and shorted the contacts, soo that explains why the engine failed.