Compression - 2001 Cavalier

2001 Chevy Cavalier, 2.2, automatic, 77,000. Motor became very loud, oil is fine, but car overheated. Motor spins but will not start, although after waiting a week I tried it again and it did turn over for a short time. Mechanic checked plugs and said there is no compression in one plug (coolant backup? I didn't understand what he meant by that). He says it could be a gasket, or worse but won't know until he opens it up. Could this be a timing belt(chain) issue? Frankly, I can't afford to begin a $500 job and have it turn into a New Motor job. Any suggestions what I can ask him next or what you may think the problem may be?