It is rings. You could have some gunk clogging up a ring and it's groove. The smoking on decel is because, on decel, vacuum is sucking oil up into the ring grooves. If you have worn rings, or gunk in a ring groove (partially seizing a ring) that oil blows past the rings (hence the term blow-by), and gets burned in the combustion chamber. That compression test is on the low side, btw. Did you hold the throttle wide open? Because, you need too so you can get a true reading. Also, a compression reading is NOT going to tell you the condtion of the rings in terms of blow-by/oil comsumption. It is ONLY going to tell you that the compression rings are still sealed well, and that is it. Any engine can have great compression, and still smoke like a freight train.
Valve seals will almost always seal up once the engine has warmed up, because the rubber seals expand and seal against the valve stems.
If I were you, I would pull out the spark plug, put the piston at bottom dead center, fill the cylinder with marvel mystery oil, reinstall the plug, and let it sit for a few days. This will help to clean the rings an their grooves. It does work, so please, no one start a fight over this. It works. I just did it on a Mojave that sat outside for 6+ years and smoked on decel. It no longer does it now that I have done it twice. Matter of fact, roughly a 1/2" of Marvel seeped past the rings and into the bottom end. I have done this on several other bikes.
After you let it is, remove the plug BEFORE YOU START IT! YOU WILL BEND A VALVE WITH ALL THAT MARVEL IN THERE!!!!!!! So, with the plug out, turn the engine over (will make a mess) to clear all the Marvel out of the cylinder. Putting a rag over the plug hole will catch most of the oil. Get yourself several new plugs, install a new one, ride the bike, change the plug out for another new one, and you should be good to go. This is cheap, and well worth the effort.
