The precise location of the crankcase blow-by vent will vary with each airframe, but they are generally an aluminum tube pointing out the bottom of your cowl opening, where the air exits below and behind the engine, just ahead of the firewall.
I'm a bit surprised that your AME didn't quickly track down the source of the leak when you did the last compression test - it only takes a minute to verify if it is rings or exhaust (rarely intake).
The rope trick is well-documented via a service instruction from Lycoming, where every 400 hours to avoid exhaust valve sticking, you insert a length of poly rope into the cylinder thru the spark plug hole.
This allows you to rotate the prop, compress the rope, and remove the exhaust valve retainer and keepers. The rope is removed, and the exhaust valve is dropped into the cylinder with mechanical fingers holding it through the port.
You ream the valve guide out, put the valve back in, feed the poly rope into the cylinder again, rotate the prop, and put the valve retainer back on, and you're done.
http://www.lycoming.com/support/publica ... I1425a.pdf
Again, your AME knows all this ... that's why you hire him, right?
P.S. If it's rings, consider a pulling the jug, honing it, and installing a new set of rings. Won't cost you that much. It's possible the engine wasn't broken in properly.
Another thing that can happen is corrosion on the inside of the cylinder. This apparently can happen because of the nitriding process - you park the engine for a long time, you get nitric acid eating away (or so I was told by an engine guy).
Free advice: if you can't cheaply refurb your cylinder, buy a new Lyc cyl assembly. Don't buy one of the crap clone replacements, unless you like reading AD's.
More free advice: hours since major overhaul is almost completely irrelevant. You hurt an engine more by NOT flying it. I used to fly a twin with 5500 SMOH. I flew another aircraft (T-34 in Atlanta, GA) that was flown so hard (and always WOT) that they eventually tore the wings off it in flight, but they flew that TCM IO-550 well past TBO, and when they tore it down at 2600SFN all the parts were within SERVICE LIMITS.
Think about that for a moment.