Check in area of exh valve where head/block meet for oil on head/block,a somewhat common problem on old K series eng is a leaking head gasket in this area.Another common problem on K series when they get tired is sticking valves due to carbon buildup on stems.
If eng burning oil it probably needs a rebuild,a more accurate way to check internal condition of eng for wear/leakage is a leakdown test,a compression gauge test isn't that accurate due to function of acr & only indicates peak compression when cranking & can't pinpoint internal leakage.
I have a tired/long overdue for a rebuild K301 on a wh tractor,this past summer it got to the point when cold I would have to almost flood it by pumping gas/starting fluid into carb to get eng to start,after eng hot same would run reasonably well after that.Had some spare time last month & did some quick checking on eng,found head gasket leaking in area of exh valve,replaced head gasket,eng will now start somewhat hard without priming now when cold,however I still have to crank for a period to get started to load cyl with gas to raise compression due to worn cyl/rings.
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