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With air coming from the crankcase it must be in the cylinder/ piston....if he is correct about where the air is coming from.
It also could be a hole in the piston, although if that it would probably have zero compression not 60.
It is a long shot on fixing one hole but possible if the stars are aligned and you have been an excellent person.
If the cylinder wall is good you may get by on ringing that piston or even replacing it, but if the cylinder is scored or worn too much it will have to come apart and then you may as well do all five cylinders.
As Brian said, you will just have to tear off the head and see what you have.
Good luck.
Tom W
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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.
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