2000 Yamaha 4-stroke 100 - Heavy knock & Loss of Power

I've got a 2000 Yamaha 4-stroke 100 horse motor that needs some love. It has a heavy nock and a loss of power. At this point I figure I have three options.

Option one: Have the power head rebuilt
Option two: Have the power head replaced
Option three: Part the motor out and replace with a brand new model.

Due to cost I'm really leaning towards options One and three. I dont really care for the idea of dumping 4 grand into a 8 year old outboard and having no warranty (option two).

How many people have had outboards rebuilt in the past (I'm talking bored, pistons, rings, bearings, etc). Was yours sucessful? Trouble free after the fact? How many hours did you put on the motor?

I'm worried about getting this thing rebuilt and then having it either blow up, or not be dependable.

[boats.net]

Rebuilding would depend on what causing the knock, if crank and rods are damaged it may be costly to rebuild.

My other problem is that I'm located in Oregon. Not a lot of outboard rebuild shops out here...

Would a compression test on the cylinders verify that I have a bad cylinder and need to pull the head?

[boats.net]

Pull the head and check condition of cylinders and see if loose play in rods.