Hello, this is a common problem in all IC engines. It is likely not the rings or the head gasket, for reasons, you may already know (the compression is great).
Adjust the valve clearances and check the head fastening bolts are the correct specified torque (as found in the factory manual). That may help bring the pressure up in the 125psi cylinder. 140 and 125 aren't wonderful, but if it starts and runs, dont worry.
The causes of the smoke could be from a couple of sources, and 2 spring to mind when you say 1980...
Valve steam seals. This requires pulling the head off, cleaning the head and reinstalling the head with a fresh set of valve stem seals, head gasket and a set of freshly lapped valves.
Cracked piston ring. sometimes, not very often (and more in cars...) the piston ring can crack, giving you good compression on the TDC, but allowing oil vapor to pass through the gaps. Often this will score the bore too. The oil ring can sometimes break and cause this to happen, and the spark plug will tell a story of Crustacean. Black and crusty. Hopefully it isn't this.
The crankcase breather. Also uncommon, and more likely on a bike that has had a lie down. Or overfilled oil. Sometimes, if your crank breather is still plumbed to the airbox, you can get oil mist coming through the airbox, and there will be signs of this. Gronky oily air filters are the giveaway.
I am sure an AI will tell another story, but an AI will also tell you a DT175 head doesnt fit on a yz125, and that the xs250, xs360, and xs400 have no common parts.
My bet is on valve stem seals. And if the head is off do the other long term maintenance while its out. All new gaskets, timing chain, a thorough clean and whatever else (perhaps methinks a spicy cam grind?)
