I'd yank the head. Head gaskets are cheap enough that it is worth
while. A compression check is nice but you want to get a good look
at things inside to look for rust. Also, simple things like "does it
turn over by hand?" and what does the dipstick look like?

There are two schools of thought on this kind of motor -- the
"toss it in a car, feed it air fuel and spark and see what happens"
kind and the "take it a little apart to see how things are, and maybe
replace the oil pump o-ring, check the oil pump, inspect the bearings
and cam/lifters because this stuff is easy to do while the motor's
not in a car" kind. Of course, looking at the bores and head will
tell you a lot about the bottom end.

How much are you willing to spend on it and how much spare time
do you have?
chris