Does the engine have excessive blow-by? (remove the oil filler cap with the engine running . . . if lots smoke blows out, that's blow-by). If so, that indicates compression getting past the rings. That would explain oil on the plug as well. However, if it's just worn rings or a broken ring, you should have LOW comression, not NO compression. No compression is usually a valve problem. Or, a dropped valve seat that's held the valve opened enough for the piston to hit it and it's knocked a hole in the piston.
To see if the rings are the culpret, put some oil in the spark plug hole and recheck the compression. If the compression comes up some, that would indicate a problem with the rings.
Like Nick said, it could be a lot of things . . . some minor and some major. From what I've read in this post, I would suspect the compression is getting past a valve (almost always an exhaust valve) or escaping between the head and cylinder. I don't think it's a dropped valve seat . . . that usually makes a lot of noise. It could just be a valve is adjusted too tight. Do what Nick said . . . remove the rocker, and look at the top of the valve stems. If they sit level, reinstall it and adjust the valves (no idea how to do that with hydraulic lifters on a bus, but there are others here that can guide you on that). If that doesn't fix it, you probably need to pull the engine and pull the head off to find and fix the problem.