Sounds a little short but it is a new engine and the rings have not had much chance to bed in. I just stuck a finger in my Galloway flywheel and it takes about 3 seconds before compression is lost and thats putting about as much pressure as my finger will take against the spoke and that has not had masses of running.

How did you finish the bore of the CI cylinder liner? that should really be honed. Are teh rings made as described in the build notes?

The fact you have some compression makes me suggest that you leave it as that for now and see how it runs, these engines don't have massively high compression ratios so as long as there is some vacuum/compression you should be OK.

On small engines the bore should have been honed,when you tested to see how long the vacuum lasted did you oil the bore and rings. I would suggest running the rings in by rotating the engine for a couple of hours at about 100 rpm.You could place the engine on a bench or workmate in front of your lathe,fit a pulley on a shaft in the lathe chuck,and fit a vee belt around the pulley and around one of the flywheels,the inside of a vee belt will run on a flat flywheel,set the lathe at its lowest speed and try it,keep the piston and bore well lubricated.Full size Hit and miss engine do need reasonable compression to operate the automatic inlet valve,some engines when running take two or more sucks at the fuel before firing,usually caused by poor suction due to worn bore or rings or the ball valve in the fuel line not seating correctly,I have found this by experience having owned a few hit and miss engines.