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Don't throw away the car yet. Ring failure on the 5 cylinder is rare. But, on the early versions, oiling of the rings only happens when the crankshaft turns fast enough to splash oil on the rings. When the engine sits for long periods or has been flooded and gasoline washes off the oil from the rings, compression decreases rapidly.
A 'wet' compression test on a cold engine is the only way to determine actual compression values. I always reccomend a warm engine test when possible, that way oil has had a chance to get to the rings and stay there.
I suggest driving the car a bit and keep the revs above 2000 and warm the engine up, wait for the spark plugs to cool off, then pull them and recheck the compression on all 5 cylinders.
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My back feels better when I sit in a Volvo seat
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