Compression Test on my 318, not good

The "smoking" after it is warmed up is more concerning to me than the compression test results. That could be some massively worn valve guides. I bet your compression and smoking could be cured with rebuilt/new heads..... Just a guess though.... :) . Of course, this would be cheaper than a rebuild of the engine. I would take the heads off and see the condition. If its the heads, its an easy fix. If its not the heads, then they needed to be pulled to rebuild the motor anyways. Oh, by the way, replacing worn heads with leaky valves and valve guides with good heads will be an instant performance gain along with better gas mileage and no smoking! Or, of course, ignore it and drive it like it is.....