I bought a compression tester, which read precisely zero on all cylinders. As the engine ran and the car was perfectly drivable, it was a fair deduction that the gauge was faulty. I returned it to the supplier, who emailed back saying essentially 'yes it's faulty isn't it' - gosh it's good to know I'm not going mad sometimes. Replacement on its way, but not here yet.
Fast forward to today - Mac came round with his working compression tester, which read a consistent 160psi on all 4 cylinders. Hurrah, a solid head and head gasket. We took the rocker cover off anyway and inspected the tappets. All were perfectly correct, in fact a fraction too tight, and the rocker assembly was in beautiful condition:
What this playing around did reveal was the source of the problem - the gasket between the exhaust manifold and the downpipe had failed, and there was a pretty major exhaust leak coming from the join. This explains the diesel puttering, the hesitation and lack of power. Now I just need to find a gasket, and figure out how best to replace it, but at least it's a pretty innocuous problem compared to the potential of OMGHGF. Mac also suspected the manifold gasket itself might also be leaky, but I'll replace the downpipe gasket first and see what difference that makes.
I do like finding out what is causing a problem, even if it hasn't quite been solved yet!
