I'm so sorry.
Is he happy and playful?
If his pain can be managed and you can afford this, there is no reason to euthanize. It is possible that the LP surgery will work just fine. Isn't it worth a try? And the cyst will likely come back, but what if it doesn't? And what if he only has to go under once a year to take care of it? He can get his teeth cleaned at the same time.
Now if he is in pain and nothing can be done for that, then euthanasia may need to be considered, but I just don't see that as a good option right now.
If these problems can be managed and his quality of life is similar to that of other dogs, I'd try it.