Help Lost compression between #2-3 cylinders!

[dcarchitect]

Ok, so in the category of better to have left it alone (but why); please read

I had larger sway bars put on my 91 318is Friday.
Well returning back to my apartment building; I decided, for the first time EVER (dumm) to drive the car down the ramp to the underground to take my old parts etc.. back to my basement storage, instead of coming in the front door and using the elevator.
The ramp transition scraped bottom and broke the catalytic converter pipe, just ahead of the cat, and then suddenly car ran really rough.
So I figure it also created a blockage, so the next day I rumble down to the muffler shop and have a new hi-flow cat welded on.
This did not fix the problem.
Went to my local mechanic, found out its running on 2 cylinders. (2?? Hell my ducati can barely run sometimes on 2 cylinders!)
So we test the plugs, (some iridium crap I thought was a good idea), and its only putting out a feeble yellow spark, but we did a compression test, and cylinders 1 and 4 are at 175# and 2 and 3 are at 60#(oooooh noooo!) .
Today I swapped out to new NGK plugs to see if it helps, much better hot blue spark, but not enough to light up cylinders 2-3 with 60#compression.
we did the "squirt oil in the plug hole" trick and compression did not come up, so its NOT the rings.
So what s left to cause loss of compression if not rings?
Valves and/or head gasket? or???
No symptoms of oil in coolant or coolant in oil.
I am looking for a cause; but have a lame, novice theory.
The old cat-converter was pretty gummed up, at 133k miles, putting a flashlight at either end shown ZERO light looking in the other end.
So is it possible, I have a leaky exhaust valves and the back pressure from the cat was the only thing holding back enough compression for combustion on cylinders 2-3?
So then when I bottomed out on the ramp and broke open the pipe just ahead of the cat, i relieved this back pressure by allowing it to leak out everywhere, and thus revealed the problem with the compression.
Not a clue.
Previous owner claims to have replaced head gasket, but did it himself, and he was clearly no BMW tech, more a Chevy/Ford Pick-up truck guy, who bought the car for his daughter.
previous history also included a cracked lower oil pan he unsuccessfully re-welded, and I have since had replaced.
(another theory, daughter of PO ran the thing dry and burned some valves, blew head gasket.......)
Well now that I have this bucket of bolts to fix, who has a method to clearly diagnose whether its valves or head gasket or other, short of taking the head off?

Thanks

[dcarchitect]

Still cracking my head trying to figure out if I can solve or fix this short of pulling the cylinder head.
Will get a full leak down test to find the source of the lost compression.
Questions;
Will the 2 cylinders fire on 60psi compression with good spark?
Should I replace the coils first?*(135k miles)
any other thoughts?
anyone
anyone,
Buhler?

[KenC]

They won't fire at all at 60psi... not even close.  175 is even a little low (you want to be in the 200 range).

Could be leaky exhaust valves, but highly unlikely that a possibly clogged cat was creating enough pressure to act as a band-aid for them.

The leak-down will tell you where it's leaking from... report back after that has been completed.

[dcarchitect]

That's exactly the feedback I was looking for.
saves me from buying new coils.
Off to get the leak down test over lunch...
We'll see.
Thank you.

[dcarchitect]

about 3/8" long chunk of head gasket between cylinders 2 and 3 was gone, sending head out for inspection, pressure test and resurfacing.
Integrity Motors in San Mateo CA doing the work.
Imad, the owner seems to be very knowledgeable.
We'll see how it goes.

[dcarchitect]

Got the car back,
runs ok. Integrity had a 20% off labor coupon in the newspaper the day I brought the car in for work.
owner refused to honor coupon. He told me $95 per hour is the discount rate, and if I want to use the coupon he'd charge me $140 per hour.
(considering three other BMW shops charge $95 and Peter Pan BMW Dealership charges $125, Whats so integrity about this place?)
So, the next day, the power steering is making noises, AND there is Power steering fluid drops all over the Airbox.
They say its not their fault, and want to charge me to look at it.
Integrity Motors?
Blaaaa, right.

[szed03]

Ahh so a blown head gasket.  I wish I had stumbled on this thread earlier!  We were doing engine performance related diagnosing, specifically concerning compression issues at school.  Low compression on adjacent cylinders is almost a dead give away on a blown head gasket.

FYI compression and cylinder leakage testers can be had for very cheap.  You will need a source of compressed air to do the leakage tester though.  Would've saved you some money.