Had problems with overheating two weeks ago that boiled out my radiator into the overflow. Water got into the air intake, but the car kept running fine. Then 3 days ago my 1984 Mazda 1.1 liter RX7 with Carb started up, ran rough, and didn't give me enough power to move the car.

I brought it to the dealership and they told me that the compression was bad, particularily in the rear two spark plug ports. They recommended junking the car.

Well it's still a great looking car with just a little too much rust and wear to consider a engine rebuild at 3 grand.

A mechanic two years ago was able to restore the compression by "pumping alot of really light oil into the engine and freeing up the spring-loaded seals" I'd like to give this a shot before giving up my RX7 to the spare part graveyard. Has anyone tried this? What type of oil did you use and where/how did you get the job done?

 

lol, the two rear spark plug holes. as if they'd be different. Sounds like your dealer doesn't know much about rotaries.
If you've had problems already with carbon lock, your motor could be carbonized worse than han solo in jabba the hut's lair.
But before you give up, I'd try the Marvel Mystery Oil technique. Some people tout the ATF method, but MMO is said to be better. I haven't tried this myself, but you may try to pour some MMO into the lower spark plug hole and let it sit for awhile. Ideally, you want to let each side of the rotor soak for awhile, but that may prove difficult.
There are some posts on this already. I'd try to search for MMO treatment or ATF treatment and read some old threads, if I were you.

 

Tried MMO, which gave me enough power to drive up and down the parking lot, but not enough to venture onto the street. So it looks like I got parts for a 84 1.1 liter carb rx7. Specifically, I've got the glass sunroof and and jacket, like all the rest of the car (except the engine and rusted out carriage) in pristene condition. Anyone need parts?

 

You could get another engine and install it. There's not much to it. I'd rather do an RX-7 engine swap than a piston car.