If you really want to keep it and it is in as good a condition as you say then rebuild the engine. The mech is probably right about the rings. It may need to be bored or resleeved and new piston/rings installed. Larry Bible can tell you how much it will cost if you do the majority of the work yourself. Another option, if you have a place to disassemble it is you could "part it out" and sell the parts off of it.
What part of the country are you in? I may be interested in it if you do sell it as is - email me.

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Jim