Thanks for this help.

Can a leak-down test help to determine if the problem is with the rings, the head gasket, the valves etc ?? does it tell you where the problem lies??

It can to the degree that you can hear the Air leaking for instance in the Intake or Exhaust Manifold due to the Valve seating area being worn.

Concerning the Copression test. If you have the Harbor Freight Compression testing kit the adapter that goes into the Injector hole has a sizable empty space in it. some have said this space lowers their compression as read on the Gauge.
Also if you go through the Injector Holes it cost you a little $s to replace the Injector Heat Shields when you re-install the Injectors.

Using the Glow Plug is a little more difficult due to the space available making it slower to move from Cylinder to Cylinder. And, the compression tests is supposed to be done within a certain temp range after the Engine is warmed up.

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84 300D, 82 Volvo 244Gl Diesel

You're welcome.

As mentioned, the leak down test is used for that very purpose.

I've posted the procedure from the FSM in this link: OM617 leak down test + valve spring removal question

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83 SD

84 CD

have you adjusted the valves?

If you tested cold that is on the low end of what is needed for reliable starting. I doubt it would cause significantly low power. Have you used biocide and changed all your filters?

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.