I'm definitely choosing path 1, which is to become a senior dev. I prefer technical-focused jobs. Learn from mentor programmers, get into teams and learn formal development practices, and then help out programmers less experienced than myself. I've never held a senior title, never led a group, nor even been involved with the process of hiring other programmers.

I currently live in Chicago which is pretty good for COL/salary ratio, for the average programmer. Caveat: I am not average. I consistently get offers from very low paying jobs- as in "$25/hr on a contract" low. This comes from the tendency to being let go from jobs without having another one lined up, so I never could afford to wait much longer for a better offer to use as leverage. Also, I don't qualify for unemployment insurance.

That has put me in the bottom 15-20% of local jobs by total compensation. If I were to restart as a junior programmer at one of the better companies, I'd actually be getting paid somewhat more than at my last job (and with insurance benefits for once).