I'm sorry to hear of your dilemma.
CA treats comp time just like PTO/vacation time, and under the laws of the state of CA, you are entitled to be paid for all of your accrued comp/PTO/vacation time immediately upon termination from your employment.
The offer is an attempt to cheat you and you do not need---nor should you agree---to go along with this apparent attempt to circumvent the law. CA allows you to sue in small claims court for up to $7,500 and that may be the place to start. The employer owes you payment for all 130 hours.
At the same time, I'm pretty sure that the CA Department of Labor (DOL) would be very interested in knowing what the employer is trying to do---again, as this violates the law. The DOL can even assist you to get the payment that you are owed---so you might consider this route before considering a lawsuit.
I wish you the best in 2011, and success in this claim.
Because I help people here, like you, for a living---this is not a hobby for me, and I sincerely XXXXX XXXXX abiding by the honor system as regards XXXXX XXXXX I wish you and your family the best in your respective futures.
Would you be so kind as to Accept my Answer so that I may be compensated for assisting you? Bonuses for greatly informative and helpful answers are very much appreciated. Thanks Again,