Finally got back from dealership - not much info from them, but back on the phone with kia - finding the leakdown showed air getting past compression ring and oil control rings and tech can feel air from the dipstick tub (I think they meant tube but it says tub) on cylinder 4.
Did some meditating from the engine building days of years ago, and thought of this.
Will try and make it simple:
When a normal engine is running, the rod bearing clearance at the crank, is, let's say .002" and when going through the piston cycle over thousands of miles, the cylinder walls wear ever so slightly, normal occurence.
Now, that cylinder wall wear stops when the piston reaches the top of the stroke and the heads downward.
The very top of the cylinder sees no wear and that is called the piston ridge. Example, when the piston comes to the top, there is an unused portion of the cylinder that has no wear. So, through the cycle, the cylinders wear and there is a ridge at the top.
Now, when the engine develops a rod knock, in layman's terms, the coating on the rod bearing wears off and with the additional clearance, the rod knock develops when the piston changes direction.
Hope we got this scenario as here comes the reasoning for the broken compression rings.
As the rod bearing clearance has grown indicated by the knock, the travel of the piston will be greater as it goes through the cycle, and as the upward travel is longer, even a few thousands of an inch, the compression ring makes contact with the piston ridge at the top and the ring breaks.
I say that if #4 has no compression, the rod bearing on #4 is gone and that is the problem, additional piston travel. Additional clearance, longer piston stroke, ring hits piston ridge, breaks compression ring.
Wish you were local, I'd talk with them, but show them this and have them install another engine.