1990 Mustang 2.3 Cyl # 3 dead

I have a 1990 2.3 Mustang that suddenly started a solid misfire with loss of power. When I asked if there was and unusual bang, crunch, clatter, etc.
just before the loss of power the answer was no. When I went to drive the car home I am quite sure that for a brief second it ran on all four.
When I pulled the plugs all were fine except #3 which had large (not oily) deposits on the centre and side electrode.
I replaced plugs with new with no improvement. I quickly removed the plugs and tested compression, throttle closed and engine cool. This showed # 3 at 30 and rest at 90. Adding a bit of oil to #3 gave 40.
At the suggestion of a local rebuilder I removed rocker cover and checked cam. Sure enough the lobes were very worn, looked like about 1/16" had been worn off all lobes. When I reported this to the rebuilder he was quite confident this (cam wear) was my problem and suggested I install a cam kit (about $200) or bring head in for rebuild/cam kit.
Any advice/insight would be appreciated, especially as to why the cam would have been so severely worn.
Thanks
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You need to do a cylinder leakdown test. I don't think your problem is a worn cam, I'd be more inclined to think you burned a valve. Bob

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I suspect a valve as well and almost had the head off but had to stop as it was to cold and rainy to continue. I hope to get it off today.
Due to the severely worn cam I was wondering if there are alternatives to the stock cam and followers (rollers maybe)?
Thanks.

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Finally got the head off and found, as suspected, a bad valve on #3. The exhaust valve actually has a small triagular chunk out of it!
The bottom end looks good but it is dark out so I will check more closely in the daylight.
Unfortunately I sheared a head bolt leaving about 1/2" sticking out of block. Any suggestions on the best way to remove it would be appreciated.
Thanks.

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