Last time riding the hybrid, the motor seemed very noisy at idle, which I presume is piston slap.  However it still has lots of compression.   Doesn't a loose piston correspond to a loss of compression?

You can have good compression and a very loose piston.   This is very common with forged pistons especially on the 250 and 500 forged pistons. 

Forged pistons collapse rather quickly and start to slap (make noise).

There is a very common misconception that worn rings cause piston slap.  Piston slap is only caused by excessive piston to cylinder clearance.   RINGS DO NOT MAKE NOISE REGARDLESS OF THERE CONDITION.