5000S. Help!

["Tom Johnson" <nuggets@spacelab.net>]

I have recently bought a 5000S, 1985, 2.3 liter engine, 89,000 miles, 
paid $1,600.00.  I've had the car for about 5 months now and have had 
some minor problems with it since.  Well, now I have a big problem (I 
think) and I was wondering if anyone out there could give me some 
advice.  Let me prefice this problem by saying that I am new to owning 
and Audi, I enjoy driving it very much, and would like to keep it or 
buy another.

Shortly after I got the car, I had problems with it stalling and making 
noises from the rear.  My mechanic thought that this was the fuel pump 
and replaced it and the fuel filter.  The car ran without stalling, 
however, noises from the fuel pump were still there at times (which I 
hear is normal for Audi pumps).

About 2 weeks after, the car stalled on me again and was running rough.  
My mechanic looked at it again and said that he couldnt figure out what 
was wrong with it but would talk to a friend of his who works on 
Audi's.  He was told to check the grounds and after doing so the car 
ran fine for weeks.

Then, about 3 weeks ago, the car started idling rough and lacked power 
in the 1000-2200 RPM range, occuring when accelerating from a dead 
stop, or crawling through traffic.  The car ran fine at higher RPM's.  
Then about 4 days ago, the car really began idling rough (sounding like 
it would stall any second) and the sluggishness became worse and 
started to happen over the 2200 RPM range at times.  The only solution 
to get the car moving at a normal speed was to step on the accelerator 
3/4 of the way down.  If I accelerated normally the car would sputter a 
bit and rev slowly until it reached the mid 2,000 RPM range, then it 
would take off.  The car also had very poor power when going uphills or 
when the a/c was on.  Well, yesterday, the car stalled and I cannot get 
it started again.

I pushed it to my mechanic and he said two things: 1) there is gas in 
the cylinders and 2) the cylinder compression on 4 cylinders is ~60psi 
and on one it is ~30psi.  Note that gas in the cylinders was not 
evident two days ago (I checked the plugs).  Right now we are in the 
process of letting the gas dry out of the engine and seeing if we can 
start it again.  As of today, it will not start.  He is a good 
mechanic, but does not like Audi's much and has not worked on them 
alot.  He suggests for me to get rid of the car.  A little history: 
fuel pump, filter, and fuel distributor are new.  Fuel injector(s) *
may* be clogged.  Ignition system appears to be fine (but he does not 
have the computer to hook the car up to).  Transmission was rebuilt not 
to long ago and the front axles replaced.  Brakes are good and there 
are no electrical problems to speak of.  Radiator and fan were replaced 
in 1990.  Body and interior are in great shape.  

Questions are: 1) Does this sound like I need a new engine or could it 
be something else?, 2) If it does need a new engine, is it worth having 
this one rebuilt, buying a new rebuilt engine, or should I scrap the 
car and look for another Audi?  If I were to buy another one it would 
have to be in the 84-88 year range for financial reasons.  Obviously I 
want to make the smarter choice, but since I am not familiar with 
Audi's I dont know what the smart choice is.  

Any advice??