You are seeing what is pollitely called 'jumped time'. In most cases, this is caused by an overstretched cam chain that cannot keep proper tension. Take the center bolt out of the tensioner and then take the tensioner out of the head. I will almost guarantee that the tensioner plunger will be all the way out, indicating a stretched chain.
The short answer to your question is yes. The cam gear being a 1/4 turn out will cause the valves to open and close in improper time to the piston arriving at TDC and will cause almost 0 lbs. compression. As the piston reaches TDC, the time of highest compression, the exhaust (most probably) opens, allowing all that mixture to exit the cylinder before the piston actually arrives at TDC, when the plug would fire.
First thing to do...check the tensioner. When you find it's all the way out, order a cam chain and find someone with a flywheel puller. It's really not too hard to change, just takes some time.
'98/'04 MX Warrior...racing again! LoneStar, Wicked, Works all around, Web, Arias, Noss, DG, Douglas, etc., etc., etc. Gotta go...sponsors to please and Hondas to beat :)