Hi there I'm trying to repair this old 1988 xas 85 portable diesel compressor. 1600 hrs. deutz air cooled 3 cylinder diesel.

Previous history is unknown, other than maintenance was not kept up to date.
The unit has had all new fluids and filters, new oil separator filter, oil cooler was hot tanked and cleaned (it was filthy) brand new air filter as well. The engine and compressor share the same air filter. compressor oil is from atlas copco and at the correct level in sight glass.
The receiver had sludge built up in the bottom of the tank which I thoroughly cleaned out and flushed. All the valves have been disassembled, cleaned and inspected. regulating valve seems to be working as air pressure adjusts according to RV position. 
The compressor starts fine, loads up to desired pressure, then idles down. however when you open one of the larger air discharge ports, it will give out a burst of air, then slowly the flow will diminish as pressure decreases. sometimes it will surge some air and even unload itself. (load button pops out)
The engine reacts properly and goes to full throttle and tries to keep up but it just wont. If you crack a discharge port halfway (or so) it will maintain 75 psi or so but eventually air pressure/flow will diminish. There is no air/oil issues coming out of the discharged air. It seems to keep a minimum of 40 psi on the gauge with the discharge valve wide open, unless it unloads itself.  
What will cause the compressor to have low flow? ive blown all the lines out with compressed air. It seems the inlet valve is kept open under spring pressure, and close with pilot air pressure. I've tried removing pilot air to it to keep it wide open with no change in results, however by applying air pressure to the inlet valve, you can audibly hear it move.
What causes the compressor to have low flow? Also it seems when adjusting the pressure regulator, from 75 psi-100 psi, it seems to struggle getting that high. blow off valve kicks in at 105 psi. (it is a brand new replacement) can the screws in the compressor be worn out? What are the main things to check before diving into the compressor? (at that point I don't think this unit will be worth repairing)
 
Thanks,

Dan