I would really, really like to know your outcome, i noticed a somewhat of a knock/ vaccume leak sound not firing so I set up a high idle and started to pop plug wires and traced it back to #3 to find out that my spark plugs electrode has been bent by something but I can't understand why if the piston has let go enough to hit the plug why it hasnt done more than just bend the plug. I did not build the engine so i don't know the clearances but later today im gonna pull the pan then do a comp. test.

 

Sorry to bring up a thread after it is dead and cold, but i'm in the same boat that you were and was hoping you could lend me an ore and point me towards land. Same exact issues only my cylinder #7. Checked all the same things. Im running lower compression for 91, same amount of time on rebuild, etc. I'm getting ready to pull the motor and send it back to the builder (20 hour drive round trip) and am hoping it is avoidable...wishful thinking. What did it end up being on yours?

 

It sounds like detonation from the timing being advanced too much. The resulting shockwave bends the soft ground in. Try backing of the timing a few degrees. The "ping" or "knock" should go away.