DJ,
I replaced my compression block a few years back on my '85, and I've never heard of the later boats having the rot problem, but the symptoms you describe are similiar to what I had on my boat.
If you've ordered a new block from Catalina I assume you also have their drawing of the repair, or at least it should come with the block, if not I'm sure I have it somewhere. What I found in my block, and what the drawing shows were very different. My boat had layers of teak plywood laminted into a block, and the area around the block was filled with a "mung" or what looked like resin and sawdust.
After gettting the rotten block out, which was done with chisels, and long drill bits mostly I cleaned the area up and used pieces of white oak that were shaped to fit, the hole is a very odd shape, and each piece was a bit different from the last. I coated each piece in West System epoxy as I went. The last piece was sort of wedge shaped and I drove it in (as gently as I could with a 2 pound hammer) while also applying some pressure to the arch over the cabin with a bottle jack / 2x4 setup to get the head door and bulkhead / floor back to where it was. I'll post a picture...
By far the worst part was removing the rotten block, it's just not a great area to have to work in.
The only thing I would have done different was that I would have tried to apply slightly more pressure on the cabin ceiling before installing the last piece as everything settled about 3/16" when I stepped the mast. It's hardly noticable, but it could have probably been done easily at the time.
Bummer of a project, but good luck!
DanM.