You are receiving California state disability. Is your present disability in any way related to the work injury tht you are thinking about settling? Was your workers' comp case accepted or denied by the carrier? Have you already received 104 weeks of workers' comp temporary disability?
I have lots of questions for you before I answer. I would not answer quite as fast as Mr. Corson but I may well come to the same answer.
You probably ought to get a consult with a good workers' comp attorney. Certainly before you C&R your workers' comp claim. You may be signing away rights and benefits that you don't even realize you are entitled to. You also need to know how a C&R will affect other programs you're involved with, like SDI. Attorneys will give you a free consult so you hve nothing to lose. Find a good W.C. attorney here at www.avvo.com or at www.caaa.org. Or you can call me for a referral.