Why would anyone bother to disconnect the timing belt (camshaft loose) to do a leakdown? I have never heard of this....
Your mechanic said "...he is testing with the cam shaft loose (belt removed?) and nothing could be keeping the exhaust valves open...."

Whether there is a belt attached or not, the camshaft is still there! And one of the lobes could and might be opening the valves. I could understand the rationale (although I still don't agree with the method, except to make more "hours of labor" charge) of testing with the camshaft removed (you could test all the cylinders), but if cam's still there, and it's just the belt that's released, it accomplishes nothing -- and you still have to rotate the cam to be able to test all the cylinders (make sure each, in turn, has both valves close).
It's much easier to turn the camshaft against the tension of the valve springs when the belt is attached by turning the crankshaft via the front bolt.

It sounds like this mechanic is just putting his kids through college.

Change mechanics. You've probably already spent more money on labor rates with this guy than if you had taken it to a more expensive but qualified mechanic.

Good luck.