I lightened the shadows in your picture so the left side chain case is more visible.
The right side chain tensioner looks like it might be extended a little compared to when a new chain is installed.
Try removing the distributor at TDC or whatever.
If nothing changes it sounds like maybe you should remove the heads have a look and go from there.

http://forums.pelicanparts.com/uploa...1539923077.jpg

Bore scope

Did you use the shop vac yet?

Any finding.

Turn the engine til it locks. Then see which piston on each bank is close to TDC (I am assuming the dropped nut theory). Poke a screw driver down the plug holes if in doubt - there will be one on 1-3 bank and one on 4-6. If there is a dropped nut it can only wedge when you are very close to TDC.
Knowing the cylinders, then back the engine off so the piston retreats at least halfway, or fully. Rotate the engine stand so 1-3 are vertical and poke around on top of the piston with a flexi magnetic pick up tool. You should catch it if in there. If not, repeat for 4-6 side. If you don't grab anything you can prob assume nothing fallen in.
My 2c
Alan

almost home ?
 

guys... thanks for all the feedback, suggestions & encouragement.
it seems that someone, who shall remain nameless, was being a little too lady-like trying to rotate the engine. (I'm a firm believer in the old addage that if it don't fit don't force it ;) )
seems there was a slight ridge of rust in #6 due to poor storage.
current status = the engine turns over (enter sounds of cheering crowd) :cool:

BUT we're not quite home, yet. very little compression in #6 hole.

rings stuck in their grooves ?
if so, will they free up during run in ?
soak that hole w/ something (diesel ?) for a bit before attempting to fire it up ?

I'm almost there ! :D

Do the usual things when you find low compression in one cylinder:
With the engine at TDC firing position for the cylinder (#6 here), attach at least the spark plug hose connection from a leakdown gauge and blow compressed air in. Listen for where it is mostly coming out. Listen to the intake with the throttle wide open. Listen to the exhaust. You ought not to hear much of anything, and certainly not a different sound from intake to exhaust, if the valves are seating. Then listen to the inside of the crank case - disconnect the breather hose and listen there. You always hear some air escaping around the rings, so try this on #6, but compare that when you move to an other cylinder and relocate your air hose. This should tell you where the compressed air is escaping.

The only thing you could do about a valve leak is verify that the rocker clearances are greater than 0 (in case a rocker adjuster won't let the valve close), which is a bit unlikely.

There is also the possibility that a bit of carbon has broken off and sits on the valve seat, preventing full closing. I suspect that running an engine where this is the case ought to remedy the situation pretty quickly - the exhaust is perhaps the only valve where this could happen?

thanks Walt.
I'll give this a shot & report back.