Does it appear that the oil is coming from the front shaft seal?
I have had compressors run noisy for 50,000 miles with no ill effect. On the other hand, if a compressor fails internally, it spreads bits and pieces throughout the system requiring THOROUGH flushing, followed by flushing, then you flush, then follow up with a flush, then finish it off by thoroughly flushing. One little piece of old compressor can destroy the new one.
For this reason, replacing an EXTREMELY noisy compressor might not be a bad idea.
Now for the 134 conversion issue; R12 now goes for about $29 per can, and due to the fact that cars requiring it are rapidly coming to the end of their lives, the demand for R12 is decreasing which should show an R12 price decrease in the coming years. At this price R12 is the least expensive major component in your a/c system. When you change to 134, you lose about 20% of the cooling capacity. If you live in Canada, this is probably not that big of a deal. If you live in Houston and drive alot stoplight to stoplight, then it certainly is a big deal.
To do a proper 134 conversion, you need to flush the mineral oil out of the system by breaking all connections and thoroughly flush with a proper solvent to remove the oil. This is not a flush over and over operation like is required during compressor failure, but it is still a bit of a project.
After the flush, you need to reassemble with 134 compatible o-rings and a special lubricant called Nylog. Then replace the filter drier and put the correct amount of ester oil in the system. Follow that with thorough evacuation and charging.
If you were to stay with R12 and change your compressor, you could simply replace the filter drier, the compressor, add a few ounces of mineral oil, evacuate and recharge. It sounds as if you currently have a charge of R12, so you can have that recovered and basically sell it to the a/c shop that recovers it.
One more thing, be extremely careful about purchasing a rebuilt R12 compressor, most of the rebuilts are junk. I would only purchase a rebuilt from www.ackits.com. The only source I know of that may have a quality rebuilt, otherwise purchase a new one and be happy. Remember a failed compressor requires; flush, flush, flush, flush,......... You don't want to do this after saving $100 on a compressor.
Summation. I changed over my '88 very successfully, but it was a lot of work and IT has a Nippondenso, not an R4. This system lends itself well to conversion. I think they were already planning on it at that time. Your system with the R4 compressor would be much better served with a new compressor if you want to be careful, and staying with R12. I know, I don't like paying $29 per can either, but I believe it will be your best bet. Just make darn sure you're not putting it into a leaking system. If you have a leak, you need to fix it regardless of refrigerant used, so it should not be a factor in your refrigerant decision.
Good luck,