That's a difficult question to answer! For me I would probably decide for number 1 !
Reason is that I was in the same position like you, for me it was a Martin custom version dreadnought made for Guitar Center. I played one in a Guitar Center in Oregon and it had the best sound of any high end guitar they had! However the wood did not look so nice on that one compared to pictures I had seen before. So I decided to skip as I thought it should be easy to find another one. Now as you see I am in Germany. So after a while I found the same model in a shop in Atlanta online! The look on the pictures was perfect so I bought her. But when she arrived, she was spotless, wonderful looking...but...the sound was nowhere compared to the one I played! I decided to keep the guitar as sending it back was not really an option especially as I had to pay a lot of import tax. It's a nice guitar and I like it but it's not the guitar I played back in Oregon....
Anyway, I would be afraid the sound of a better condition one would match the sound you love on the one you have now. At the end you could sell the Taylor (if that would be an option) and use part of the money to fix the one you really love.
But it's a really hard decission. Let's see what others think!
Ralf