So the bronze valve seat insert is leaking around the head casing.... I believe the head is cast around those bronze seat inserts... I can't imagine the leak being that great around the casings when the engine is turned over by hand... but being a single piston ring, the excessive ring gap on the effected cylinder would cause a noticeable compression loss when turned over by hand, but at reciprocating piston speeds, the dynamic compression loss is less.

Valve seat face doesn't look uniform, maybe its just shadows... but you can use a mild abrasive toothpaste, or a pumas cleanser and lap the valve / seat faces.