[ModMech]

Well you've chose a real Truck, with a real powerplant.

The 460 BBF is about the toughest high Tq powerplant there is, and there are no "weak spots" in it's design, or application. The only thing with this truck is the Trans. The E4OD is not particularly durable UNLESS the trans is serviced regularly with a quality Dexron III/Mercon fluid. This includes draining the T/C (yes, Ford installed a converter plug, as ANY A/T should have). Typically, odd thras behavior is NOT a mechanical fault in the trans, but in the soleniod pack. They are under $200, and easily replaceable if you can drain and drom the trans pan w/o instructions.

1) Look for burned ATF, that's MOST important.

2) You compression test is a sound idea, and you method is proper for a warm engine. The starter button gets connected to the pos stud on the starter, and to the "S" terminal (smallish wire). If the truck is clean, and he show records for reparis and services, I'd skip it myself. But you may not be comfortable doing that, follow YOUR gut.