That doesn't look right. The lobe on the rear cam is about to compress or has just compressed the valve. This looks like looking forward from the right side of the engine?
The cams would rotate counterclockwise in that case. . .
Anyways, the cam lobes (ears) should be about at 10 and 2 o'clock at the top of the compression stroke. You're probably at the top of the exhaust stroke or something if that's where your lobes are.
Is that like a ton of sludge on the parts (cam towers)? Or something else?

__________________
63 220S W111
76 300D W115
2013 VW JSW TDI M6

previously-
73 280 SEL 4.5
86 300E 5 speed
2010 VW Jetta TDI M6

If the lobes pictured are both of the cylinder in question the test would normally be invalid as the cam is not on the base circle. However, if for some reason there was clearance between both cam followers and the valves then the test would be valid. The question as to whether or not the test is valid depends on whether or not the both valves were totally closed. Was there clearance between the cam follower and the valve on both valves?

__________________
"Rudeness is a weak man's imitation of strength" - Eric Hoffer

But it's not only about valves being closed. The piston should be at the top of the compression stroke. In this pic, the piston could be anywhere.
There's a different wear tolerance at the bottom and top of the cylinder wall, no? And where do you need max compression?
The leak down test may deceive you if the piston is down.
Tip: you can also watch the rotor in the distributor to see if you piston is close to tdc

__________________
63 220S W111
76 300D W115
2013 VW JSW TDI M6

previously-
73 280 SEL 4.5
86 300E 5 speed
2010 VW Jetta TDI M6

If both valves are closed but piston isn't exactly at top and air is applied through the spark plug hole, the engine will rotate. That's why I apply a quick burst of air to see if the engine rotates then turn the engine opposite to get to top.

With the piston at exactly top dead center, the engine won't rotate.

Most piston ring wear does occur at top of stroke so checking there is best however, if the rings are worn out, the will even leak at the bottom.

Update:

Finally had a moment to do leak down test right:

I rotated engine so that cam lobes for cylinder #2 were at 10 o'clock and 2 o'clock position making sure piston was at top of cylinder (inserted straw and watched it rise until stopped and checked diz to see where was pointing, i.e.pointing to #2 plug). Added compressed air and....rushing out of carb.

This result indicates an intake leak.

I re-read everyone's post, and starting with most simple, maybe carbon build up and next thing I should do is rotate intake valve. But how exactly? I have a valve spring compressor tool and new valve seals, do I go this route or can you twist valves kinda while springs are still on? I am thinking of using the nylon rope trick in cylinder so valves won't fall away...makes me nervous, though.

Thoughts?

Jub

Attached Thumbnails

 

__________________

Current:
1971 Mercedes Benz 250 (Euro Spec)
1972 Mercedes Benz 250 (US Spec)
Past:
1972 Mercedes Benz 280

Was there clearance between the rocker slide contact and the camshaft? Any clearance at all is good, just confirming that the valve was not being held open mechanically. If there was any clearance and the air rushed out, you are correct the intake valve is leaking.

If the car is drivable, consider putting a fuel cleaner such as Techron in it and drive it hard for a while and then redo the test. If the compression comes up something was on the valve seat. If the compression does not come up the valve is probably worn or burned from being adjusted too tightly. You can then decide to do a valve job or just drive it for a while as-is.

Glad to hear it's a valve and not the rings... LARGE difference in time and $$$ to fix.

Good work on tracking down the problem and keep us posted!

__________________
"Rudeness is a weak man's imitation of strength" - Eric Hoffer

So, I came across this Russian post whereby someone swore up and down that you can clean a valve by hooking up a drill to valve via a hose, add miracle oil and a few drops of kroil... I thought what the heck.

Turns out works like a charm, my psi's went from 30 to 130! Back on the road! All cylinders now 130-135. I did purchase a new head (not here yet). Figure rebuild this one and keep it as back-up.

Attached Thumbnails

 

__________________

Current:
1971 Mercedes Benz 250 (Euro Spec)
1972 Mercedes Benz 250 (US Spec)
Past:
1972 Mercedes Benz 280

What😮?

I have a questionable valve on my fin. Can you post the link?

__________________
63 220S W111
76 300D W115
2013 VW JSW TDI M6

previously-
73 280 SEL 4.5
86 300E 5 speed
2010 VW Jetta TDI M6

This will work just fine for cleaning carbon from a valve face or sticky stem, however it won't work if the valve is burnt. ( exhaust valves are the only ones that burn )