rust might have eaten some of the piston ring away as well as the liner and a bunch of other stuff. making a sufficient gap to loose compression (piston rings and sleeve), If I where you I would change piston liner (if it had rust) and the piston ring. Also check the carb, SPECIALLY the needle valve assembly which tend to get rusty and give everything a good cleanup. Change anything you see damaged. 3 years without use can be pretty tough on this engines. hope this helps!

You can find the replacement part here:
http://www3.towerhobbies.com/cgi-bin...I=OSMG0591&P=Z