Thanks for asking. I ended up pulling the head and taking it to the machine shop. He replaced valves, valveguides and surfaced it. The cylinders looked very good, with just a whisper of a ridge that you could feel with your fingernail but it would not catch on the ridge.
I put the head back on and once it got to a point where I could turn it over enough to check compression, I checked number one. It was at 100 when I took it apart, and it only came up to 200. I did not check any more, I finished putting it together, with great doubt that I had done anything to improve the start situation.
I ensured cam and injection pump timing and turned it over probably about 20 seconds when it got fuel to the injectors and lit off promptly.
I got everything finished off and test drove the car before turning it over to my daughter.
It seems that it is not using oil like it was, and she is able to start it. We had a "Norther" as we call it in Texas blow in yesterday. It got in the low 20's. I was afraid she would call any time saying that it would not start, but she came rolling in the driveway. She said it didn't start right away, but she did get it started. Nowhere to plug in the block heater at school, so she did it with nothing but glow plugs.
I have not yet rechecked compression in the entire engine, I'm kind of afraid to. I have checked everything I know to check. I've never had one of these cars that, with good glow plugs, didn't start easy in the worst of weather we may have here. I had a worn out serial glow plug 240D that started in 8 degree weather. This was when I learned that diesel fuel freezes at 8 degrees.
The car seems to be running well, but I'm really puzzled at it not just starting right up in any weather. If it were a serial glow plug car, I probably wouldn't expect as much.
The things I did to it were: fresh glow plugs and getting voltage to all five, relay working okay, fresh fuel filters, cam and injection timing check, fresh head with valves adjusted of course, near new battery from parts car, pumped with hand pump to see if there was a difference.
My confidence in the car is like about 80%. I don't really know what to do to get it to just start right up like I've always seen these engines start.
Thanks for your concern and letting me think it through in text here for everyone to examine. Maybe someone can come up for something else to check.
Have a great day,