ES2 1955 - Piston to Bore gap

... suggested it wouldn't be worn out till it was .007" over standard which is .005" at the bottom of the piston skirt.

Wear would need to be truly shocking for 40psi. Piston rings, valves. Are you testing with wide open throttle? To get full breathing?  Throttle must be fully open to get the full charge of air. Piston clearance does not affect compression except as an indication of severe wear. It's the rings that seal against the bore.

piston to barrel clearance , i use 1.5" per inch of bore

Does it improve when you put oil in the bore? If it doesn’t - suspect valves!

dan