I take your point about £120 being a lot of money to some, but that doesn't change the comparison between £ and potential injury. If one can't afford to do something with a reasonable degree of safety, then the choice must be either not to do whatever it is, or to somehow make it adequately safe or take a gamble.
I too would probably keep it by spending some dosh on some new gauges, hoses and regulator, which is certainly less than the cost of a new compressor. However, I would strip the whole thing down and assess whether I was spending out for those parts to prop up a compressor already beyond its working life or knackered through neglect.
A risk is there but, in perspective, it isn't enormous. Check the safety valve function and visually inspect the interior. If the interior looks pristine then replace the hoses, gauges and regulator. If the interior looks significantly degraded then do the hydraulic test, (being careful to full expel all the air) although if it were me, I'd throw it away at that point (drill holes in the receiver and take it to the dump).
Luna AB is a Swedish company, its name and address are on the plate in the plate in the photo. (
http://www.luna.se/)
All materials are compressible, including water, but water has such a high modulus that it can be regarded as incompressible for almost all purpose (and, counter-intuitively, it has the property that in a completely degassed state it will sustain a significant tensile load)