That sounds like the rings are worn. The way to test this is to do a compression test, which requires a diesel compression tester. Unfortunately, there are many thread sizes on the glow plugs, so you need to remove one of the glow plugs and either measure the size and thread pitch to see what yours are, or go to an automotive tool place or Harbor Freight and try to match it to one of the tester adapters. Diesel motors typically require 450+ lbs of pressure to operate within spec, around 400 or below means rebuild motor time.
Assuming you go that route, you can pull the oil pan, remove the rod bearing caps, and look at the bearings. There is some material called plastiguage which will measure the clearance in the bearings. If there is much wear shown, it makes sense to look at the crank bearings in the same way (drop two or more bearing caps) and decide what all needs to be done. Hopefully, an engine lower end gasket set, the bearings, and rings are you are good.