It's not normal.
Like you, I suspect a head gasket. Remove the plastic and take a look. If the head nuts are loose, the base gasket may be it or both. I'd replace botk anyways while that far into it.
Yes you have good compression.
You did have the carb all apart and clean (removing both jets and looking thru the holes)?
2000 GNC 5N\
2001 GNC 9N \ 40+ class
2004 GNC 9N /
2014 rock crusher "GO tortoise GO!"
2016 Byrd Rooster
Father of the "11" time National champion,and worlds fastest woman ATV racer
A few fast LT80's
250R~300cc's
300ex
350 Rancher
Kymco Mongoose
Survivor of the 12 Hours of ATV America 04 and 05