Personally... I would get a second opinion. I have never heard of a Rover V8 losing compression on all but 1 cylinder. down on a few, yeah as they get older and wear, but in my mind it would have to be a catastrophic failure to be that bad...
Also take into account in a diagnosis that most garages seem to hate P38's, and to them all they know about Rover V8's is that they will always fail, and in their eyes it's always the block.. or a liner slipping.. when a lot of the time it isn't actually that bad. Even if it was a HG failure, then it would have he to have failed between a LOT of cylinders to lose that much compression on that many cylinders.
I could be completely wrong, but something just sounds fishy about it to me.
'06 4.2 Supercharged Black/Cream "Jess" -- Bought April 2021 (NZ)
'01 4.6 Vogue Black/Lightstone "Snog" -- Bought Jan 2012
'99 4.6 HSE Cobar Blue/Lightstone -- Sold March 2009
'95 4.6 HSE Epsom Green/Tan -- Traded June 2008