He's losing ~100psi in one cylinder...can it really knock itself that far off? Wouldn't it be a really loose valve and not a really tight one?

 

Yes it can knock the cylinder off that far. At the extremes, a very tight valve will not seal at all but it seems like you'd feel that as a miss in the effected cylinder. A touch lighter than that and you've got a valve that's leaking a little on each power stroke. Each time that cylinder fires, you burn a little more of the valve and seat facing away until you're loosing a significant amount of compression and you either get the CEL or start feeling the miss or both.

A really loose valve might effect compression if it's an intake valve and it's loose enough to keep it from opening enough to allow a full charge of air on the intake cycle. If it were that loose, however, you'd be hearing one hell of a rattle out of the valve train and "know" that something was wrong long before the CEL came into the picture.

Drive Safe,
Steve R.