Feeling a bit low on compression when you turn it over by hand doesn't necessarily mean the engine's worn out especially seeing you said the bubbles are only minor (through the exhaust port?). All engines will leak slightly at least until the piston wedges into the pinch at the top. If yours has lost the pinch then maybe that's what the instructor is feeling (or not feeling ). I haven't mentioned the dreaded nickel peeling yet either.....

But like I said earlier, generally if it starts easily, tunes as normal and runs well then keep on using it. A fuel with all castor (22% is good) will help give a better seal than all synthetic if you want to try that. You should be able to get Castrol M somewhere near you. I wonder how a blend of Castrol M and Bundy rum would go?