1991 Isuzu Rodeo Can't pass Calif. Smog test.

1991 Isuzu Rodeo 6 cylinder 3.1 mileage: 88,000. Can't pass Calif. Smog test. H/C is way high, even at idle (in Calif. They call this a 'gross polluter'), l everything else is OK - car runs fine. Had tune up done - plugs, wires, dist. Cap, rotor, filters, oil, adjust timing, etc. Still way high on H/C levels. Mechanic replaced throttle body gasket, which was worn. I've had most of the general upkeep on the car done, major tune-ups and a few minor ones. Oil changes, by and large. Use 'regular' gas though. Mechanic says there is carbon buildup in the cylinders, and compression for each cylinder reads: 1 - 165; 2 - 205; 3 - 185; 4 - 195; 5 - 205; 6 - 130. Mechanic wants to re-build engine - says it's the only way. Cost is about $5200. (Does that seem high?) Says he can't get a re-built anywhere locally and needs to have my motor re-built. Says new motor from Isuzu would cost more than $5200 to buy and install. Engine SEEMS to run basically fine. Idles great, runs fine. Never any trouble. Doesn't shoot out dark smoke or anything when I start it or drive it, although you can see from tailpipe that there is a fair amount of carbon buildup there. Had trouble passing smog test twice before. Should I pay to replace the cat and O2 sensor, betting that this might fix the problem? Or will the carbon deposits and bad compression force me to need a new motor regardless?