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Low compression on #5 850

Probably just a slightly burned valve/seat. The rings are pretty robust in these engines. The 120 reading is low, granted, but filling the rings with oil (looks like you might have used too much) and then having the compression go up is a good thing. A broken ring would have left the compression the same.

If it is just a dirty valve seat, constantly driving at under 2000 rpm is not what these engine require. The valves are designed to spin when the rpm exceeds 2K and the turning motion keeps the valve seats clean and wearing evenly.

A leak down test will tell all, but it is a pain to do. And the results might not be good enough if the valve stem seals are badly worn.

With the head off, a close inspection of the valves is needed. A good machine shop might be needed. But then you need head bolts and a new gasket...
--
Keeping it running is better than buying new






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