as EFFDURATION has mentioned- may or may not be your issue but something to think about if the misfire comes back.
DME connectors/harness and the DME itself(yes the board itself), make sure there is no problem with Driver #1.

As part of all the trouble shooting, I did get into the engine bay relay box to pull the DME relay to facilitate the compression test. While in there I did check the DME harness and connections etc - no water intrusion but, might be worth going back and pulling the plugs off the DME and inspecting them more closely.

Other issue I know I have is some carbon buildup in the exhaust man/down pipes so I need to go tackle that as well - that is likely being caused by over fueling due to (I believe) a shitty after market installed a few years ago which seemed to work fine for about 6 mo and then I started getting cat efficiency errors on both banks.

The first thing to do with a single cylinder misfire is to swap one coil with that from another cylinder. You have a misfire on Cyl 1, so swap the coil with Cyl 4, then walk away.

Drive the car and wait for the misfire to return, it should be on 1 or on 4, if it follows the coil, then you have a bad coil OR the boot between the coil and the plug. If the misfire stays on the same cylinder, then you have a bad plug of fuel injection issues, or a signal problem where the computer is not telling the coil to fire. You could have compressiopn troubles, but you already checked this and the numbers look good.

Thanks for the reply. Yup - that was the first thing I did - moved the coil to another cyc. Problem did not follow the coil. New plugs, swapped injector, and cleaned them all, checked connections on harness. Issue now appears to have gone away, so I have given up now until it returns.

When it comes back you could try reducing the sparkplug gap on the missing cylinder. If that helps then you probably are not getting enough secondary coil voltage for what ever reason, if it gets worse then you might be back to looking for a fuel issue maybe from the injector itself. You can damage an injector really fast by bench testing it.

There is a lot in your first post that doesn't make sense. Not starting because the lifters have leaked down isn't really a thing. Why did you replace the starter in the first place? How did you clean the injectors?

Thanks for reply. I actually put a new set of plugs in. Also swapped out the injector and coil pack on cyc 1.

I do not think my initial issue had anything to do with the misfire problem (notwithstanding me creating the misfire issue with my efforts to swap out the starter, which involved my removing the intake plenum). I had that hard starting problem in the past btw (a few years back and I had forgotten about it) where, if I do not start the car for over a week, it is hard to start the first time - I zeroed in (mistakenly) on the starter thinking it was not cranking properly, as the sound of the cranking was not normal (that was because there was no compression due to the lifter bleed down). I sent a recording of the cranking sound to my BMW Wizard friend, and he instantly recognized that sound as cranking with no compression. I misread that problem in the beginning as being the starter, and as it turned out, my starter was just fine.

re Injector Testing: I built a test jig for cleaning injectors - I use an injector cleaning agent, under small amount of pressure, and a 9V battery to turn on and off the valve - that allows me to check the spray pattern, and verify it is shutting off properly. Have been doing that for years and never had a problem. As I said, I have put a different injector in cyc1 and no difference.

One other thing I did when I replaced the starter was I put a new (non-OEM however) crankshaft position sensor in, since it was easily accessible when I had the starter out, and figured it was an opportune time to replace the 20 year old factory one. Don't know if that would be a contributing factor to the misfire - again the engine purrs beautifully, as long as I do not load it up above 5500 RPM.

Thanks again for all your suggestions.