Land Rover Repair: Dropped sleeve or head gasket, head gasket, cylinder compression

Question
1997 Disco 1 with 4.0 engine and 109k miles. Last week check engine light came on just as the engine started to idle very rough (like a cylinder missing). Took it to a shop that works on Land Rovers and the mechanic said that the number six cylinder compression is about 70 psi and the other cylinders are 110-120 psi. Then he said that the engine needs replacing. because he thinks that coolant is leaking past the steel sleeve an into the cylinder lowing the compression and causing the engine to miss. He checked out the spark and fuel for that cylinder and they are fine. Before we consider repairing or scrapping out truck (only paid $4K)is there any other possible causes or checks that can be done, head gasket maybe?

Thanks
Steve

Answer
If there is coolant leaking into the cylinder, it would most likely increase the compression. It usually decreases the compression and causes hydro-lock, bending the connecting rod, in the worst case.  In this year and model the most likely cause of low compression would be a stuck inlet or exhaust valve due to carbon build-up on the stem of the valve.  This is a regular occurence with this vehicle.