Slow cranking would account for low compression numbers, 2.9l has 9.0:1 compression ratio so should be coming in at 160psi at sea level with all spark plugs removed and throttle propped open, to get crank spinning as fast as possible.
Starting fluid is ether so will ignite much easier than gasoline, even with lower compression.
The fact it didn't fire at all or even backfire(spark at the wrong time) would mean to me that you don't have spark at the plugs.
Battery with 12.6v or higher is a fairly new battery, dropping down to 8v when cranking means starter motor or cables are drawing too many amps, expected drop when cranking is 3volts, getting below 9.0volts means there is a problem with battery, starter relay, cables or starter motor.
But that shouldn't cause a no start, just a heads up for future issue.
TFI ignition systems are 25+ years old now and will have failing parts.
You can try putting a jumper wire from Battery + to Coil + this will make sure coil is getting power for cranking.
Good read here on TFI testing:
http://www.therangerstation.com/tech_library/TFI_Diagnostic.shtml
I would start with ignition system, get engine to fire using starting fluid, if it does fire up and then stall you can start looking at fuel system.
If you have or can get a timing light I would disconnect SPOUT and crank engine to see if spark for #1 is happening close to TDC mark on crank pulley.
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