With option 3 vs. option 2, you'll end up 66,000 miles down but $1,600 up. This is equivalent to paying 2.4¢ per mile if you buy the ticket. If you think miles are worth at least 2.4¢, you should go with option 3 (buy the ticket). If you think they're worth less than that, go with option 2 (use the miles).

Most people here think airline miles are worth from 1 to 1.5¢ each, sometimes as much as 2¢. However, this has been a subject for heated debate. Some point to "high-value" awards they've obtained, such as international upgrades, that would have cost up to 8 or 9¢/mile had they paid for them and use that as the value. Others point out, correctly IMHO, that this is bogus economics because those people would never have paid that much, and peg the value of that award at what the person would have paid for it in money had it been available at that price. Neither group has ever convinced the other. You can read the threads on the value of miles, get thoroughly addled, and you'll still have to make up your own mind.

Another consideration is when you expect to have another opportunity to use those miles, and for what. If you'll be able to do something better with them before you've had a chance to earn another 66,000, buy this ticket and hold onto the miles. If saving $1,600 is the best you'll be able to do for a while, do it.