A friend of mine has had his timing chain replaced, after it broke. The car runs very rough and there is no compression in the #2 cylinder. Could this be a valve related or piston/ring related problem? Any advice would be appreciated.

 

If the chain broke while the engine was running (which is what I guess happened), the pistons and the valves will collide and wreck each other. If there's no compression in a cylinder, the piston might be damaged or the valves don't open and close at the proper times.

Sounds like this engine is shot...

 

Ditto on what Jer said, it could just be a broken valve, but even that is in the thousands to fix considering on all the work to repair it. I have a friend who manages a MB boneyard, you should see the really nice cars that come in with their chains snapped!