3-cylinder Kia Rio

Got a 2002 Rio, 125,000 miles. Son wrecked it (mainly undercarriage), body shop made it driveable about 3 months ago. Since then, I noted it went thru oil like water through a sieve, although no oil leaks or visible smoke out tailpipe. I later noticed what sounded like a ticking valve at idle. Later on, after just putting new tires on, son said it shook like crazy and had no power. Pulled plugs, cylinder #2 has zero compression. Pistons #1 and #2 have a layer of oil on top of them, also noted #2 plug was loose and I'm sure I tightened it previously. Pulled valve cover, didn't see anything obvious wrong (busted cam lobe or valve spring, etc). This could be a bunch of things, I know (head gasket, burnt/cracked valve, busted piston or rings, cracked head, cracked block in order of expense). Engine has never been run hot or overheated. I did the timing belt at 65,000, no fun but it can be done. Any ideas on what I should look for specifically? I need to get this thing running quick and cheap, as I can't scrap it with a new $300 set of tires per the spouse.:banghead:

You say that # 1 and 2 have a oil film on top of pistons but have you tried squirting oil in # 2 and then checking compression to see it it is the rings or the valves?