hi howard
i have run quite afew model engines and learnt alot mainly the hard way, i shouldnt worry about your compression, once the engine has ran for a while it should get better you could always try the old trick i do of running the engine in on a electric motor this works well.
as said above you need a demand vavle and i think this is where your problem is if your coming straight off the bottle in the engine this will never work these little engines need hardy any fuel at all.
i had the same problem on my half size gardner until i fitted a demand valve and between the valve and the engine you should fit a gauge to see how much gas is going throngh u want the neddle to hardly move.
i would try to restrain from fitting a spark plug, if you do you will need to fit contact points somewhere on the engine and i think with the classic shape of the otto engine the spark plug and contacts will spoil the look of the engine.
if you dont have no joy with gas i would try methanol or sim with the glow plug, on a early style engine like this i would keep away from ungly looking spark plug
hope this is of help
jonathan