ANSWER
In the first post, I described two test, one for ignition, and one for compression. The ignition test needs to be looked at carefully.
Ignition test procedure: Remove the spark plug, hold the body of the plug against the cylinder head, and pull the recoil.
Ignition test result: There were sparks that were as expected for a small engine.
Ignition test conclusion: NOTHING
If no spark appeared, the test would have indicated that there was a problem in the ignition, so either the armature/coil, the spark plug, the air gap, or very unlikely the magnet on the flywheel was bad.
Seeing sparks only meant that the ignition might be OK. Why? Because the spark plug was firing in air rather than in the cylinder. The voltage needed to fire at atmospheric pressure is less than when the pressure is increased. I changed the spark plug, and the engine started right up and ran normally. Apparently the impact with the log dislodged a deposit in the spark plug which fouled it enough that it would fire in air but not in the cylinder. To confirm what had happened, I cleaned the original plug with a spark plug cleaner and reinstalled it on the engine. The engine again started right up and has been running with this plug for several hours now.