After doing a 45+ minute commute for 18 months, the job would have to be pretty spectacular for me to consider anything over 30 minutes again (although if I was only in the office couple of days/week then maybe).
It really impacts your quality of life, 90 minutes each way is adding almost 50% on to your working day, assuming you do 9-5, you'll be leaving the house at ~7.30am and getting home at ~6.30pm.
Sounds like since the appeal has failed, you only really have 2 options at the moment - take the redundancy, or accept the contract, but start looking for a new position immediately.
It depends what your current financial situation is like (e.g. do you have savings to cover several months out of work) and how confident you are in finding something else in the next 3 months, but if I were in your position in the current market, I'd be going for option B. You've got 2 years to find a new job before you take the financial hit. The commute time is going to suck, but at least the money will still be coming in which will take the pressure off.