Low Compression on Stock 318

Uh oh....Is it only on at idle or low RPM, and then goes out as it revs?

If so, time to pull the pan while you are doing the gasket, and clean out the crud. Then pull the oil pump and clean the screen on the pickup. Then I'd put the pickup onto a NEW stock pump. Who knows what crud has passed through it; the oil filter is AFTER the pump so all the crud scores and wears the pump.

It is also possible that the oil pressure relief valve is stuck open and killing the pressure.

If the light is on all the time, regardless of revs, then maybe the oil pressure sensor or the wire to it is shorted to ground. Pull the wire off of the sensor (on the back of the block beside the distributor) and if the light goes out, then either the sensor is shorted or the oiling system is reeeeally bad.

You had better figure out this oil light situation before the whole engine goes kablooie. That may be part of why the rocker failed.