Small Craftsman Air Compressor

My son-in-law has a small air compressor. It's a Craftsman, with a small tank, about the size of a larger fire extinguisher, with the motor/compressor unit on the top. He used it one day last week. Worked fine. Next day went to use it and it'll only build up to 20 lbs. He brought it over today and we took a look at it. 4 screws hold the cylinder head on. Inside, there are 2 pcs of metal, very thin and flexible that I would describe as reed valves. When the compressor is drawing in it closes off the exhaust side of the compressor. When on the compression stroke, the intake reed goes up and closes off the intake passageway. All sounds good theory. We got inside and it looked pretty clean except for 2 pieces of what appear to be parts of a gasket. We cleaned both reed valves with carb cleaner to get all the residue off, and we cleaned the mating surfaces on the cylinder and head. Now comes the test. He just ran to Wal Mart to get some compressor oil as he'd drained it out prior to coming over.

One more thing, the check valve seems to be working just fine, according to him. He checked that early on in the process.

Any other thoughts on what could be going on? Says there are no audible leaks and in our turning the motor over by hand the piston seemed to be in fine shape.

Thanks!