LOW compression

What's wrong with just a valve job? You rebuild the entire engine if it has high mileage on it, if there's an obvious reason for spending all that money. Otherwise, the mechanic can remove the cylinder head, pull off the valves and confirm the diagnosis. There should be visible signs on the #2 intake or the #2 exhaust valve and seat to confirm that 80 lb compression reading. Of course, he may not know how to do this, which could be why he'd prefer that you buy an exchange engine.

You could also have the #2 cyl compression test done again, with you standing right there so you can see the gauge reading yourself. If this is a mechanic you trust than that might not be necessary.

As far as changing or rebuilding an engine. If the exchanged engine is a rebuild, the difference lies in what you get in either rebuild, which parts, what quality parts, what price, what guarantee, how good is the re-builder. You might have to dig for this information, but there's no other way to make the comparison.

BTW, if you chose a valve job, there is the risk that there is a crack in the cylinder head. So in making the choice you need to know what it might cost to fix the crack, or replace the cylinder head. And you need to gage the odds that you will run into that problem (ie, was the engine overheated recently, or overheated many times in the past, is the car hot rodded or driven like a baby). It can be tricky to figure out and you might want to find a good local machine shop and get their opinion on the cylinder head for your particular car. They can often tell you if these heads are always cracked or if they are really strong and rarely crack.

I know this isn't really what you asked, but doing a valve job can cost half the price (or less) of a rebuilt engine so it's worth considering.

Jc