MCA Blues are only $200 more than the BC's. MCA's are proven adjustable coilovers from the same company who has been on the wtac podium 3 years in a row, took out fastest rwd and 2nd fastest outright in pro class. Australian made, with Australian warranty, with a company who has a face.
How bad is the compression on cyl4? Get a second oppinion. Go see the blokes at techworkz or import parts canberra as they both know their stuff.
Beware that the front cut may not come with the bumper, lights etc that you want. if it does, it will cost you a hell of a lot more than 10 grand.
A bloke just sold his s2 with a 26 engine, if memory serves it was ~9 grand. So look at the cost vs resale.
You can buy a genuine 250/260rs for 15-20 grand and sell your s2.