I had a 3rd degree tear in 2009, and I'm 26w with baby 2.
I too hadn't a scooby what to do this time. Both options seemed awful, and I felt like I was stuck between a rock and a hard place.
I did a lot of reading and went over my notes from last time with a Supervisor of Midwives. The latter really being the thing which helped me come to a decision.
I felt utterly traumatised by my daughters birth. I was in horrendous pain and remember very little aside from that. It was in no way, shape or form and enjoyable experience even once she was safely born. I felt no pride for delivering her myself. Only embarrassment and regret. This compounded with the 3rd degree tear made me feel very anxious about doing it again.
Going through my notes helped me understand the precise reasons why I was so scared in a more rational way. Pinpointing these helped me figure out which things I could overcome and which things I couldn't.
She also helped me understand the risks involved re: the tear. From my understanding, you are actually only 9% more likely to suffer a tear with subsequent births. There don't seem to be any definitive stats on how likely you are to suffer another 3rd or 4th degree however. Many women go on to have a tear-free birth with subsequent babies. Most consultants seem to suggest and support a natural birth with a well healed 3rd degree.
However, the picture changes if you have continence/control/urgency issues following your tear. There is up to a 25% chance of making your current symptoms worse by having a vaginal birth, regardless of whether or not you have a tear.
This, for me, was too big of a risk. I'm planning on more children after this one, and I'm only 28. Life-affecting incontinence is not something I want to gamble with. I can cope with the urgency issues I have, although I find the fact I cannot control the passing of wind very embarrassing :( I couldn't cope if I took that gamble and lost.
I am booked for a c-section at 39 weeks.
Another thing the SoM said which helped me was to not only look at the pros and cons of natural vs section, but to look at them in terms of short and long term effects. So yes, a section screws you in the short term...but even if there are issues how many will effect you daily 2 years on.
Take your time over your decision. Bear in mind the differing advice depending on whether you are symptomatic or not. Talk it through properly with someone if you can.
Good luck.