Subaru Outback advice needed

Have an '03 Subaru Outback Ltd. 184k miles. Great car all in all. Has been burning 3-4 qts oil between changes every 3-4k miles. Stated idling rough after warms up [intermittently], slight ‘shimmy’ at stoplights. Check engine light on always, flashes at times when warms up but even then doesn’t flash all the time. Took it to dealer for upcoming smog check, have a bad oxygen censor and possibly bad catalytic converter, but also said low compression no.2 cylinder–which is what I’m wondering about. Without further diagnostics they’re talking about perhaps new pistons, and/or valve job and/or short block rebuild. My questions are 1-is there any more diagnostics possible to narrow it down without pulling it apart? and 2-is it worth a rebuild or should I sell? Great car otherwise, they’re talking 3-5k range for repairs, blue book on the car is 4-6k rough estimate? Been a great car all in all, aside from clutch replacement this is the first major repair issue. What would you do?
Thanks for your help with this one…

My best advice is to take the car to an independent foreign car shop–preferably one that specializes in Subarus. Personally, I would not even think of sinking $3k-5k for repairs into a 12 year old vehicle with high odometer miles, but your value system may be very different from mine.

Hopefully an indy mechanic can give you a firm diagnosis, rather than “maybe pistons”, “maybe valves”, “maybe a total rebuild”. All of those “maybes” should not inspire confidence, IMHO.

I would start with compression testing, and then you can make your decision, based on those results and the diagnosis resulting from that testing.

Low compression on one cylinder could point to tight valve lash on one of the valves in the cylinder head. This is usually applicable to exhaust rather than intake valves. Adjusting the valves correctly may solve the rough running problem temporarily but it could come back as it takes little use for exhaust valve faces and seats to suffer damage from tight lash.
Once the figuratively speaking beach erosion begins on valve surfaces it will continue.

Oil consumption is another issue and could be due to piston rings. The first paragraph is somewhat major work; oil consumption is major work and then some.
It seems to me that the diagnosis should have been carried out a little further. This could have all been easily sorted out without leaving you to wonder what’s going on with it.