Do a dry test followed by a wet test. An increase when wet indicates ring leakage which is sealed by the added oil, most engines will show some increase when wet. If there is little change when wet then this indicates that the valves are the limiting factor. If the three good cylinders increase when wet but the low cylinder does not then this would be a good indication of a bad valve in that cylinder (or perhaps less likely, a gasket or similar problem). In the event that there is a scored #3 cylinder I would try that cylinder again after wetting with a heavy oil to see if that made any difference as a heavy oil may fill the score enough to raise the compression, but a borescope is better for this as you can also inspect the wall for crosshatch and the color of the wall between the top rings can indicate how effectively each ring is sealing.
Based on what you have reported, I suspect a valve problem in #3. A leakdown test or even just applying shop air pressure to the cylinder (using an 'air hold' fitting in the plug hole, which can be purchased or fabricated from a spark plug by a welder) may allow you to hear leakage into the intake or exhaust manifold (or both).
If the bad valve is on the intake side it may show as small rapid fluctuations in a vacuum gauge connected to the intake plenum but a burned valve is more likely on the exhaust side. which can sometimes be heard as a roughness or popping in the exhaust but this is doubtful as the sound must make it through the catalytic converter and the muffler..
One of the downside of 4 valve engines is that they double your chances for valve and seal failure.
Many aviation mechanics and repair shops have borescopes and would allow you to take a look inside if you pulled the plugs in their parking lot. (Offer money, lunch or case of good beer.)
I mean no dissrespect, but as a 1cam (2400 rpm sweet spot) owner I feel that many 2cam drivers use too high a shift point. I doubt that you are doing any serious damage to the engine IF the low compression is caused by valve leakage. A broken ring which is scoring the cylinder is another matter, but if that is the case the damage is probably done already and only a borescope will give you an answer. If the leakage is caused by a burned valve then it will probably continue to get worse and the compression will continue to drop.
Only you can make your personal cost effectivness decision regarding repair and it depends to no small degree on your estimate of the remaining life of the rest of the car. You do not have a lot of miles on the unit but some would say it is getting a little old in years.
The neccesity of a clutch replacement makes the engine rebuild timing decision much easier. Once the engine is out of the car a ring and valve job does not seem like such a big additional expense.
AFAIK the OEM seals are of the rubber umbrella type. There is an aftermarket wiping lip type seal (which I believe was originally mfg by Perfect Circle and often called a PC valve seal) which requires machining the top of the valve guide for installation. I have used these seals on SBC but have no experience with Saturn head rebuilding. There are some experienced racers here and some may reply, or you may wish to search this group in Google groups or the forum at
http://www.saturnfans.com/forums/search.php or
http://www.saturnfans.com/forums/archive/index.php/
Rebuilt valve guides do make an engine run very smoothly and IMHO this is worth doing right. Another downside of 4 valve engines is that the cost of a valve job doubles.
You are doing the right thing by asking questions and doing a repair based on a well thought out plan.
Good luck, YMMV
