Short answer is that it is under the spark plug. That whole thing is the top end of the engine. Pull the spark plug and put oil directly in spark plug whole and redo compression test. If oil increases compression it's likely the rings, if not it's a issue in the head which could be a valve not closing all the way so that it can't create compression when the piston comes up. Hopefully at that point the head is still good and you would want to adjust the valves to 0.005" intake/exhaust when they are in the closed position.
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