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99 Volvo 3l, Bad compression, leak down tests shows valve blow-by, pictures inside, help

My manifold had a crack in it causing water intrusion. The first compression test shows erroneous results; some cylinders with no compression. The second compression tests showed cylinder one 80/90, cylinder two 140/150, cylinder three 95/100, and cylinder four 90/159. That’s dry/wet numbers. I went ahead and did a leak down test. All cylinders had significant air blow-by past the valves. There was so much valve blow-by on cylinder four, I don’t see how it created so much compression wet.

I removed the head. I have attached pictures. Piston three looks like, to me, to have detonation signs. Would you look at the pictures please and give me an assessment? What should be my next move? Note, that the whiteness on the other pistons is from the flash.851A014F-E2CA-443F-9562-385D8AA98397.jpg2499FF6E-6410-4397-BE3C-18832FF6F891.jpeg9E7F4A9B-46C7-4B85-9787-0430843052DE.jpg548A2CDF-5EAE-4D2E-A113-81683F4C03D2.jpeg168AEA29-88AC-4DE1-8E65-E7342E326F13.jpg48E6DACC-5394-4CD8-8433-D3E28D66B67B.jpg
 
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