However, my personal guideline on overboring is that, unless the engine is question is known to have thick-wall castings that can accept overbores of .060 and above, if I need to go bigger than .030 over, I sleeve the cylinders back down to standard.
.060 overbore is OK. If you want to go further than that, it's a crapshoot. I've read of going .120 over sucessfully, but you need to have a spare block on hand. You can bore it all you dare to and it won't raise compression one bit. Compression is raised by shaving the heads or milling the top of the block.
I rebuilt my 4 cylinder in my 1990 and went 0.060 over and have had no problems so far. Based on others have said, I'm guessing that it'll be just fine. Personally I'd say just go with rebuilding what you've got. If I were faced with the decision again, I'd upgrade to a 6 cylinder, but I'd still rebuild all of it anyways. So, to me it boils down to whatever work you want to do after the rebuild. I'd rather just put it all back together knowing it was new than have to weld new mounts and fish through wiring. But then again I can't weld, so that probably has something to do with it. Either way, you'll be happier in the end with the new motor!
1990 Red YJ 2.54 L (Rebuilt) 5 Speed with 94 rollbar | Dynomax Exhaust | Luk Clutch
2.5" Old Man Emu over 31x10.50 BFG MTs on 15x8 AR 767s | 1" Daystar Body Lift
Two Tops | Full and Half Doors | KC Daylighters | Hella 5500 | OME Steering Stabiliser
Sony CDX-GT300 | Kicker ZX500.1 | Kicker ZX350.4 | Kicker ZX200.2 | Kicker L5 Solobaric Sub | Kicker 6x9's | Apline 6.5's | Boston 4x6's
Truckstop CB Antenna | Class 3 Hitch