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Ā· Old Guy
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I have a Universal 5444 in my boat that is equipped with a compression release gadget like yours. That lever is attached to a rod with flat spots inside the valve cover. When "off" the valves operate normally, but when you pull the knob (like a choke) it pulls the lever and rotates the shaft so that the valves don't close completely, releasing compression.

It really is worth digging around to find a service manual for your engine and following the instructions there, but it sounds like just possibly your rod is turned a bit at rest. My recollection is that there are little access plates in the valve cover that you take off to check the adjustment.
 
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