Bc,

Welcome and congrats on your new hobby! 40 pounds is low. You really need to have the motor on a solid stand or get some help to check compression. How many pulls did it take to get to 40pounds?

Anyway, keep asking questions. Lots of great help here, and the 1958 Johnsons are some of the best!

I’m confused, what type of compression tester are you using? One that threads into the cylinders? Or, is it one that you have to hold the rubber tip against the plug holes? 40PSI seems low, especially if you have squirted oil into the cylinders, which would usually increase compression readings. These engines don’t have high compression, but you should see between 80-90PSI anyway. I would try a different compression gage, and have an assistant hold the engine in place on the stand while you crank it…
If the compression readings are accurate, they are too low. Does the paint on the engine block appear to be discolored/burnt? If so, perhaps someone overheated the engine and blew the head gasket, which might explain the low but even readings. If the paint looks OK, perhaps someone ran it without any/enough oil mixed with the gas which has scuffed the pistons and scored the cylinders. But, again, I believe this is just a case of inaccurate compression readings or a damaged compression gage…
Your engine may look real nice cosmetically, but it will require some work on different systems to make it a: “reliable daily runner”.
Your next step, after figuring out the compression readings, will be to drain/inspect the gear lube. You will see two large fill/drain screws on the gearcase, one low on the skeg, the other is just above the horizontal anti ventilation plate. Please DO NOT remove the little phillips screw at the bottom of the gearcase, this screw secures the shift linkage. If you remove it, the linkage will fall down out of place. Go ahead and remove both large fill/drain screws and watch what drains out. You may see a very dark lubricant drain out, which is old, but OK. Newer lubes are lighter in color and somewhat translucent. Milky colored lubricant means there is water leaking into the gearcases. Raw water draining out of the gearcase means big trouble also. Let us know what you find.
These are great old engines, and certainly worth renovating if the basic mechanical systems are in good shape. Most likely, the ignition system will need to be overhauled, the carb will need to be cleaned, and a new OEM carb kit installed. The gearcase should be removed, and the water pump impeller replaced. And, like Mumbles said, this is very important if you have been rotating the crankshaft backwards, because this is a good way of breaking the rubber impeller blades off.
Post some pictures of your great old engine, hopefully we can help guide you…

I just got POOFED again 🙁 so here goes with my red book back-up option

To work on your QD go to the red book in the picture just retype the URL on top to reach it otherwise this web site will poof my reply to oblivion…again

see other usefull inks

http://www.leeroysramblings.com/johnson_QD.htm
http://www.youtube.com/watch?v=ga1Cjymj6ms&feature=youtu.be
https://www.youtube.com/watch?v=tA0u62hciwY
http://www.marineengine.com/parts/johnson-evinrude-parts.php?year=1958&hp=10&model=QD-19

Bubba Trout wrote:

an additional thought for compression test is to have the throttle wide open when performing your test

I was under the impression that you don’t need the throttle wide open for a compression
test on a two cycle engine. Perhaps because of the porting? I don’t
understand the difference, but hopefully someone can explain.