Repair manual says service limit is 115 psi. The rings' sealing capability are what provides the compression in the cylinder. If the rings can't seal (due to excessive wear, excessive ring gaps, damaged cylinder wall, etc), you will have low compression.

 

First of all,,, I'm new to strokes as well but we own 2 of them now. So, I've been reading everything about them that I can find.
The fact that you gained 12psi compression by doing those things tell me that you're on to something. Have the symptoms changed any since you did this? Meaning, is it still dying and hard to start when hot?
Bad rings and gouged cylinder walls don't get any better and 12psi is a pretty significant gain. IIRC, unlike 4 strokes which pull all their air from the intake side,,, the 2 strokes also pull some air from the exhaust in order to scavenge fuel that would normally be lost (due to the lack of valves). So it stands to reason that a restricted exhaust would affect compression,,, right? I would experiment with this a little more before dropping a few hundred on a rebuild.
When I got my 300 2 stroke, it smoked like a freight train after it warmed up. My first thought was,,, bad rings or worn cylinder walls. BUT, I did some reading and decided to try and clean out the exhaust. Mine has 3 plugs (2 in the spark arrestor, and 1 up near the engine). I could only remove the one closest to the rear of the arrestor because the others where seized. I got a little trash out by following the procedure and it helped the smoking. So, I decided to take a ride with the plug out,,, man you should have seen all the sparks and trash flying out the hole. Now, it has the typical 2 stroke smoke and no more James Bond smoke screen,,, LOL.

 

well, just got back from the trails. he decided to go ahead and take it out. it did alright at first and then started dying again. it did it 3 times and after the third time it just stopped startin at all. the second time it did it, the rope on the pull cord broke and I had to do a trailside repair on that. third time it broke, the cord broke again in a different place, in the middle of it! I ended up having to pull him out, about 3 miles. don't know what he's going to do with it now. he bought it new in '00 and he's definitely got some good riding out of it. I'm gonna mess with it some more and take off the exhaust and see if its stopped up.

 

Dont waist your time messing with it!Pull the cylinder and fix it.

 

not sure if he's gonna rebuild it or not. he's been wanting a different one for a while now and since I got my sportsman he wants something bigger than the trailblazer. I may buy it from him and rebuild it myself.