Sam's way of testing is the most efficient. Cylinder leak down test tools are a huge waste of money.
Do you know what piston ring are, and how they are installed? There is a gap at the end of them when they are in the engine. On new rings, the gap is several thousandths. You think air can get through a gap like that? Yes.... it can. So, yeah, it's going to leak into the crankcase some. That's why I hate leak down tests. You can determine the same thing with a fitting in the spark plug hole and just air. My problem is, I don't hear as good as I used to, and I can't always hear the leak. That's where a smoke machine comes in handy.
This is a 2 cylinder engine that's easy to work on, and parts aren't that costly. Take both heads off, true them up, fix the blown seal, take out that second vent that doesn't belong, clean up the filter housing and be happy. Lapping those valves is a waste of time. You lap new valves. Lapping old valves is like sanding wood with 5000 grit sand paper. Yeah, you take off some material, but it's going to take a lot of work to sand the board.
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