When the valves/rockers are set and the cam-chain is adjusted, assuming all else is good, the motor should run and most of the compression will return. I would expect smoke on start-up and burning some oil due to leaking valve seals and worn valve-guides. Very typical for the F2-3 motors. As the wear gets worse, the valves tend to show dimples from the rocker-adjusters.
Do some hunting on these pages for more info..............