tecumseh small engine low compression

I am new to DIY small engine repair, and am just trying to learn.
 
I bought a used Tanaka THT-2100 hedge trimmer that worked beautifully for about a year.

 
After a year of use, it got harder to start, and finally won't start at all anymore.  It has spark and fuel.  I did a compression test and it was low... at 50 psi.  I opened the engine and found the piston and cylinder walls smooth... no scoring.  I replaced the piston ring and filled the cylinder with a bit of oil to aid in the compression test, but its still at 50 psi.
 
I cannot find any cracks in the head or any reason for low compression in the cylinder head.  Are some cracks just undetectable?  Is there anything else I am missing or that I could check?  Could the low compression be caused by the carb or muffler not being attached properly?  I noticed there are no gaskets on either and I wonder if that could be an issue... I would think the compression would only take place in the top of cylinder so the carb and muffler would not be an issue.
 
Like I said, I am just trying to learn on this thing, so any advice would be appreciated.  Thanks in advance,
 
Mike