What happened to the 318 in 1971?

Half a point cr at those low power numbers is worth 5 hp at best.

It wouldn't be the CR I would be worried about. It's the cylinder pressure. A drop of 40 PSI indicates a much larger drop of actual compression and power.

If I recall, the major reason for the drop was cam changes. They made changes to the cam to reduce cylinder pressure, allowing for "reduced" emissions. To meet EPA guidelines.