Compression Test on my 318, not good

Sounds like another case of "not enough abuse" to keep it fresh LOL... First I'd change the oil to some CONVENTIONAL stuff then go out and really wail on it a few times, hit the gas at low speed to build cylinder pressure which will push the rings up against the cylinder walls harder and wear them into the surface.

If this were a 100,000-mile engine with a stock bottom end I'd say it was toast but in your case it should still be fine unless you did something wrong. Also you say 17 years and only 2-3k miles, I could definitely see your valve stem seals getting dried out from sitting that long.