I'm sure its got to be in that region Neil, the boiler is obviously making steam and plenty of it, It's just not keeping it in.
BUT if as Ron says the blower and regulator are shut, where can the steam be coming from?
Logic dictates that if all avenues for the steam to escape are covered, then pressure must rise.
So, if with a good fire and all valves shut, pressure is not being seen there must be a hefty leak from somewhere else.
Could there be a Stay cap / nut missing / loose (hollow Stay? – not familiar with this boiler) this would show up on the pressure test.
There does look like there is a fair amount of what looks like soft solder on various joints – could these have blown, unlikely as it again has passed a test and any excessive smokebox pressure is likely to be forced back into the firebox (blower off), and Ron says its ok on air.
Could it be that the steam blower is not actually shut? wouldn't have thought that that would have caused a drastic failure in pressure rise, part of the steam test is to run at max blower and check that the safetys can cope with the steam produced.
Could it be a broken or incorrectly reading pressure gauge ( I see no test markings) but if the gauge was out the safety would have shown some action.
Ron, any chance of a bit of video in the smokebox when its up and running? I agree with Neil that a blower venting to excess would give the problems described had you not already stated that all valves were shut.
Then again, is the blower valve actually shut, and that the valve handle isn't just spinning on the spindle with the valve stuck wide open?