Sorry fo the delay in responding, was focused on getting the woodpile in order. Pulled the engine and opened it up Sat. Found the problem:
Looks like the intake valve departed somehow (how?!?), dropped into the cyl, punched up through the head nr the spark plug, dropped down again, then punched up a second time and lodged where you see. Motor still turns over freely, but I guess this explains why I have low compression. LOL
Called around looking for a used motor but noone I could think of (incl kijiji) had one. Picked up a new 7hp chonda from Princess Auto Sat afternoon ($130 + tax) and spent the rest of the day cleaning up the engine area, mounting the new and MacGyvering a solution for remote throttle linkage. Was more of a challenge than I thought since it all had to fit under the air cleaner... first couple of attempts didn't end up fitting underneath. Ended up welding a nut to the head of a bolt and securing in a conveniently placed hole in order to hold the throttle cable (took the old screw-in type cable end off the old motor), then looped the cable through a hole in the throttle arm and fastened in place with a removable ferrule. Made the old throttle return spring shorter to complete the assembly. Didn't get a pic after (I know, I know, will try to get one tonight). You'd think the remote throttle linkage bits would be included but I suppose that's one way they cut costs.