Help needed with 97 GC I-6

I recently purchased a good condition (body/interior) 97 JGC Laredo 4.0L I-6 for a great price...one that if I had to put a new motor. Previous owner, after doing the radiator, waterpump and thermostat, pulled the head, put it back on. But they didn't put the valve cover gasket back on, so anything they've done in their backyard is now suspect. $40 for a gasket and the truck is running. But, doing a compression test:

From back to front
157
135
126
155
160
85

The sparkplug on 6 (85) was somewhat oily.

I also can’t tell if it really is overheating or not. I let it idle for over 15 minutes, drove it around, it stayed at 235 (midway between 210 and 260, 210 being normal) when it shot up to 260. Turned the truck off, turned it back on, it went to 235. This morning on a very short drive to work (2 miles), it went to 235, hovered for a minute or 2, then shot up to 260. Top radiator hose is hot, no heat in cabin though. Radiator overfill tank is "bubbling" like a watercooler. Check engine light is on of course.

Any thoughts?

With only 85 psi on that one cylinder, is it worth your trouble to troubleshoot the overheating problem? Oil on the plug and low compression probably means broken rings. Or, if the PO didn't do a good job on the head removal and reinstallation, that may be coolant on your plug due to a bad head gasket. Either way, your overheating is a symptom of bigger problems. If you pull the head again, look at the discrepant cylinder and check for scoring on the walls, and of course, look to see if the gasket was leaking or if you have a burnt valve also.

Boiling water in the overflow tank is caused by a bad Radiator Cap, get a good 18lbs cap, this will also help with the overheating.