Wow that piston looks pretty bad. I'd be surprised if still has much compression.
Glow plugs blowing, when I used to work in a hobby shop i saw this problem a lot. there is a small piece of metal floating around in that engine that is fouling plugs.
The way I used to fix that was to disasemble the entire engine and clean every single part with nitro spray cleaner. Take everything apart including the carb (you dont need to pull the bearings out of the case though).
That fixed the problem every time. Good luck.