As suggested by previous posters you are flying blind. You need to do a leakdown test and listen for where the air is escaping. If it is not heard through the oil filler cap, then the compression loss (assuming there is a loss) is valve related and the bottom end of the engine is probably pretty good.

The oil light bothers me though. Do you mean the low level light, or the low oil pressure light? If it is just the low level light, then it is probably not worn out down below. These engines typically respond VERY well to a valve job including new valve stem seals.

Don't throw out the baby with the bathwater. Diagnose before you act, hopefully your doctor does.

Good luck,