1998 Cadillac EL Dorado 3rd Cylinder misfire code

Hello everyone!) I need a little guidance with my beautiful Cadillac Eldo. I bought the car with 57,000 miles on it and about 10,000 miles after I purchased it it threw a 3rd Cylinder misfire code. Before I checked the codes I made the mistake of bringing it to the dealership and they said it was the torque converter in the transmission and would cost 4,000 dollars to fix! I may have been young, 19 at the time, but I'm definately not dumb. My car ran fine it just had the check engine light on, so I changed the coil pack for that cylinder and replaced plugs and wires with no affect, the light was still on.

That was about 5 years ago now, and the light is still on and flashes at times. The only differrence that I've noticed is I'm getting worse gas mileage 16MPG AVG, when it used to be around 22, and the idle isn't the best but not horrible. Other than that it starts right up everytime and drives just fine. I had a friend mechanic take a look into the misfire recently and he said it only misfires on the downshift. I hit the gas and it accelerates just fine? I took it into the local shop and the mechanic there said I had some internal compression issues and to just drive it until the engine goes then replace it. Sounded kind of odd. I've had a couple people say it might be bad piston rings or valve seals in that cylinder, but they're unsure. PLEASE could somebody guide me in the right direction? I LOVE this car and don't want to give up on it! THANK YOU!