Engine or Exhaust problem?

I have a 97 Dodge Ram 1500 Truck. When we bought it two years ago it had only 60000 miles on it. Unfortunately it had sat for some time without being driven and now burns oil. We were told from a mechanic that some of the parts inside may have dry rotted and it probably needs to be rebuilt. It only burns maybe a quart a month so we have just dealt with it and kept putting oil in it when needed. About two weeks ago I was driving home from the dump and began losing power. By the time I got home I was barely going 5 mph into the driveway with the pedal pressed all the way to the floor. I can now start the engine and it will set and idle fine but as soon as you press the gas pedal it bogs down and shuts off. I was told from a friend that it may not be a problem with the engine. That it may be an exhaust problem. Is that true or does it sound more like it's time to rebuild the engine?