Jim,
You are correct about the compression test being done at 80 psi with a
standard size orifice.  The FAA specifies that 75% of that pressure remain;
ie, 60 psi must show on the second guage.  There is a caveat to this rule
however:  Continental Motors has a Service Bulliten out (TCM SB M84-15) that
allows a lower number to be used if the leakage is past the rings only.
You may find that information on the Continental owners web site.  You must
calibrate your compression test set to a master orifice to use the lower
values given in the SB.  A good repair station will have the master orifice.
M84-15 gives details.  My personal test set has 42 psi as a minimum but they
vary.
I really like David Jones' solution using Aero Kroil in his cylinders.  A&P
machanics for years have found many ways to "prop up" (sic) a low
compression reading.  Usually spraying thick oil into the cylinder is the
method of choice and probably not too legal either.  I think the Aero Kroil
method passes muster on that account.
The leakage from your cylinders can be heard and will help troubleshoot the
problem.  Open the oil filler and remove the dipstick, remove the air
cleaner.  Listen as the air is put into the cylinder (careful of the prop).
Leakage heard from the dipstick/filler tube is ring leakage.  If you hear a
hiss from the exhaust pipe it is the exhaust valve leaking.  Likewise
hissing from the air intake is the intake valve.  If the rings are leaking
rock the prop back and forth against the air pressure to try to lock the
rings in place.  Watch the guage as you do this.  If a valve is hissing
reassemble the engine and go fly around the pattern and try again with the
engine hot.  Failing this you may remove the valve cover and stake the
valve; ie, hit the top of the spring with a leather or other soft mallet
while there is air pressure in the cylinder.  This will make a popping sound
as air is released and may seat the valve.  Be aware Continental does not
allow any leakage from the valves.  Period.  Finally a borescope inspection
will pinpoint a valve problem.  You can actually see a burned spot on a
valve or the seat with a borescope.
Good luck,
Walter Dodson 1895740IA