Yes,it is possible. When water (or large amounts of water vapor) is present in the cylinder the water takes up some of the volume of the cylinder, hence, higher compression pressure. Once the water is expelled through the valves the compression pressure will fall back down to about normal- depending on the size of the leak path in the gasket, or worse, the size of the crack in the cylinder head.
However, as someone else mentioned, it is best to these types of test with the fuel system disabled to protect the catalytic converter when the engine starts again. Nonetheless, bear in mind that the object of a compression test in these circumstances is not to find a definitive compression pressure; it is to determine the position of the leak, which will be on the cylinder(s) with the lowest compression pressure.