Did PSI jump up when you added a couple of tablespoons of oil to that cylinder (helping seal up the rings)?

 

Could be a stuck valve.
If you take off the intake manifold

take off the valve cover

take off the rocker arms.

Fill cylinder #5 with a rag or something to keep the valve up.

Take off the valve spring.
Put a drill onto the valve.
Spin it a bit.

Then get the valve spring back on.

Probably bad idea - as this is too hard.

The diesel noise may be a blown head gasket releasing gas toward the outside.

At 30PSI you will not get ignition in #5 now.
You should hear the lost compression if it is a bad head gasket.

If the intake is stuck open, you should get some problems with mixture possibly.

If the exhaust is stuck open, probably not much affected.
But, you would get perhaps a problem with your catalytic as unburned gas will be going into the cat converter from #5.

If you are going to run the engine, disconnect the fuel injector wiring for #5.
You could drive it around on 7 cylinders if you disconnect the fuel injector.

I drove my saab on 3 out of 4 cylinders for a time by disconnecting the fuel injector until I got a new ignition module.

 

Added a little oil and it made no difference...still low compression. I just don't understand how the code and the noise aren't there when in park but show up when I try driving it.

 

If you can, do five again but put a few ounces of oil on the piston. If it doesn't seriously change the psi, the problem is a gasket or valve. I think you have a bad gasket. This is exactly what happened to me.

 

Nvrmind. Just read you did the wet test. While driving the ignition advances and this dramatically changes the combustion and load on the motor so you will hear the noise much more clearly.

 

Has anyone had to do a valve job on theirs? What kind of expense am I looking at? If I get it all apart and find out it's just a HG, would it be worth the peace of mind to go ahead and do the valves too? What else should I replace while I have it apart?

 

You may as well do the head gaskets. The valve job will come "free" with that.
I would not drive it.
#5 is not igniting the gas that goes into it.
#5 is throwing unburned gas into a cat.
I am surprised you are not getting a flashing check engine light - meaning cats is getting damaged due to unburned fuel.

 

Once the head is off you should be able to see the culprit right away. Figure between 50 and 100 per head to clean and resurface. Unless you see obvious wear or damage to the valves, I would leave them alone.