Long story short.. I did a pull from a light, was in 3rd and heard a loud bang and instantly the engine died. My wife was behind me in another car and said when this happened a large flame shot out of my tailpipe.

After towing it home checked timing and everything lined up but noticed the crank sprocket bolt was about a turn loose. (didn't pull cover to see if oil pulley lined up) Did a compression test and and got about 85-90psi on all 4. Checked gauge with air compressor and gauge works fine. Can't find anywhere that rents a leak down test kit and don't really wanna pay $40-$60 to buy one and only use it once.

I just did a complete new timing belt and pulleys along with a head gasket about 8 months ago. (arp bolts torqued down to spec) When turning the engine by hand everything moves accordingly and feels smooth. Also verified cylinder one is at tdc with timing marks lined up using a long screwdriver. Pulled valve cover and visually everything looks fine.

If it wasn't for the half compression I would think fuel or ignition is the problem but I can't explain why I would have exactly half compression on all 4 and this just happen all at once. I know I could be directed right to the problem with a leak down test but was wondering if anyone had any thoughts on what it could be. The car isn't a daily driver so I'm not in a terrible hurry to fix it or spend a ton of money figuring out whats wrong with it.

I would first make sure that your compression tester is accurate. Than i would pull the timing cover and check the timing mark on the crank pulley. You will also want to check and make sure that you didn't sheer the key on the crank. If the crank bolt is loose it is possible that the key is sheered and the pulley is not lined up properly on the crank. The marks will still line up, but the timing will not be in phase with the cams.

Thanks for the reply. However as I stated in my post, I thought of and tried everything u suggested. I thought that the crank bolt being loose might have caused a problem but with cylinder 1 at tdc the timings marks on the cams and crank all line up

At this time is the head on or off the car?

If it is still on, you can do a "Poor man's Leak down test"
Just inject compressed air into each cylinder and listen at the TB and tail pipe, if you hear the air escaping then you know you have bent valves for some reason.

If the head is off.. do this..
http://www.dsmtuners.com/forums/newbie-forum/420313-how-fluid-test-4g63-cylinder-head.html

^ +1 was just going to ask and suggest the same thing!

A screwdriver in #1 is good enough to get in the ballpark, but to be 100% sure you're at TDC (unless you're very good at eyeballing the dwell), you'll have to pull the timing cover and check the timing mark. This absolutely smells of timing not being correct.

Head is still on. I just went and bought a leak down tester ### I was tired of messin around but I'm still confused. With everything lined up and cylinder 1 at TDC im getting air out of the intake, however, maybe im wrong but the intake cam seems to be just starting to open the valve. This doesnt make sense to me because the marks on the cam gears are lined up. So the lobes should have the valves fully closed. And no I dont have adjustable cam gears If i rotate the engine so its about 2 teeth back from the timing mark I get no leak. Also I know that at this position the cylinder is not all the way up because if i rotate it the 2 teeth forward the screwdriver still movies up slightly. I took some pictures of the cam on cylinder 1 with all the marks lined up.

Yes the intake should open just a hair before TDC.

Remove the cam gear bolts and check that you have not sheared off the cam alignment dowel.