Compression testing is not a good way to find a head gasket leak. Checking the compression only tests one way of leaking (the sealing of compression) and will only find one once the problem is major.
The methods of testing for exhaust gas in the cooling system is a good approach. Most head gaskets we do are failed with external leaks or are leaking coolant into the cylinder. We test for the latter by pulling the plugs and placing a cooling system pressure tester on the system. We pump the system to the cap pressure rating and leave it over night. The next moring we crank the motor being sure nothing is in the line of fire from the spark plug holes. Any amount of water/coolant coming from a hole is too much.
Bosch Master, ASE Master, L1
33 years MB technician