OK. Now for a stupid question. A while ago, I was driving down the freeway when the engine coughed and then started running rough. I barely made it home. I checked the compression and all cylinders came up to about 165 except #2 which registered zero. My first thought was I busted a connecting rod so I gave it the highly advanced and technical drinking straw test. I pulled the spark plug, inserted a long straw and hit the starter. The straw came flying out so I think the rod's OK. I checked the compression again and got 125 and then zero again. A friend has suggested that my timing chain may have slipped a tooth. However, when I hit the starter, it starts right up, it just runs rough. Also, wouldn't a slipped chain affect the compression in more than one cylinder? I'm hoping it's a timing chain and not someting more serious.

Thanks.

Check for bent pushrod or 'sticking' valve on that cylinder.

If it will start up and run, Have you put a timing light on it ???? IF the chain jumped. timing will be off.
A lot of the original chains had the "nylon" covered cam gear, to help quiet the motor,
if it went, you'll also have to pull the pan to clean out, the broken pieces from the oil pump pick-up screen.
Has the motor ever been apart ?
Timing cover taken off ??
Also is there any chance you bent a valve or push rod ?

I agree with both of the above. If it is a valve or pushrod, you might try pulling off each plug wire and see if it will tell you which cylinder is affected. Alternately, try spraying a little water on the exhaust manifold at each port; this sometimes will reveal a weak or non-firing cylinder and is pretty easy to do. The good cylinders will boil the water off quickly at idle.

Based on your discription of the problem I would have to say that it is not the timing chain.

The timing chain would indeed affect all the cylinders. From what you describe it appears that the #2 cylinder is not sealing. You just need to find out why.

Your choices-

Intake valve-
exhaust valve-
Rings-
Head gasket-

To Find out which one, you will need a leak down tester. During the test, if air is escaping through the exhaust valve you will hear it or feel it comming out the exhaust pipe. If it's the intake valve you will hear or feel it through the carb. If the valves arn't leaking your going to have to pull the head to find the problem. If it's one of the valves check for a bent pushrod that is limiting valve travel. Also check the rocker and spring to ensure that no foreign object is jamming them up. If everything appears normal your back to pulling the head off.

Good luck