A good diesel will indeed give PSI compression this high.

Bajaman,

Regardless of the cause, it will have to come apart. You should plan on boring cylinders and using oversized pistons. There are MANY here on the site who prefer to replace sleeves and go back to standard bore with the original pistons. I am definitely NOT a fan of that approach on a diesel engine due to the high stress that a diesel piston deals with.

In addtion to that, you may very well have a broken piston ring land or a failed piston. I have one such piston in my box of momentos.

Good luck,