If your compression gauge has a rubber hose and the check valve is at the gauge instead of at the end that attaches to the motor, you will get low readings like that on these small engines due to the volume of space in the hose. These motors are sometimes known to blow the head gasket, creating a path in between the two cylinders. If this has happened, you will get low compression readings and the compression will be the same on each cylinder. Removing the head, you can easily see the bad spot in the gasket. If the head gasket is bad, as described, you will probably not be able to get it to run.
Dave
