Halfway between on and start is the pre-heat position. Your key placard should be labeled from left to right as follows: ST(for start), OFF, ON, H(for heat), and ST again. As mentioned, when you get to the H position, you should see at least 30A of current draw on the Ammeter. This will taper off to about 20A after about 20 seconds. I believe on this ignition switch, it maintains the heat contacts while you rotate the key to start, so it is still heating while you are cranking the engine. Mine starts reliably down into the low 40's-upper 30's. Towards freezing it may take a second attempt. Still running the original battery since 2005, but I do keep my electrical contacts clean and weatherproofed. This is important as that starter needs a good supply to spin up properly. A quick check for this is to measure the voltage drop when cranking. Measure first at the battery terminals, then measure the voltage drop at the starter. In a perfect world, these would be the same. If the starter voltage drop is significantly lower, then you are loosing the difference in the wiring and connections.
I installed a 1000W tank type heater in line between the block drain(left rear near the oil pressure sender) and the extra port(for a cabin heater?) up near the thermostat housing/water pump inlet. When freezing out, 15 minute preheat easilly pushes the block temp toward the 60's for an easy start...
I ALWAYS use compression release for EVERY start. There are some very good reasons to do this, particularly on the first cold start.
1. Saves wear and tear on the starter motor trying to crank past compression on the cylinders to get the engine up to speed.
2. Takes compression loads off of the rod bearings and gives the oil pressure a chance to build up and push some oil into the bearings to keep the bearing material from contacting the crank journals.
3. Sometimes things break like head gaskets and injectors, or water finds it's way down the exhaust or intake. So the potential exists that there may be fluid on top of a piston. Cranking a diesel with fluid in a cylinder can get real expensive real quick(cracked piston, bent rod, twisted crank ECT). Compression release gives the chance to clear any fluid in the engine without hopefully doing any damage to the engine...