I recently took my 99 Avalon (approx 178K miles) in for a tune up. They replaced the plugs & wires and I also had the valve cover gasket replaced.

About 30 miles after I had picked up my car, the engine light came on. I went to Autozone and the code was P0420. "The PCM has determined that the catalyst system efficiency for bank 1 is below threshold for the current engine operating conditions." Probable causes are listed as 1. Catalytic converter defective (failure possibly due to #2, #3, or #4). 2. Engine misfire or running condition. 3. Large vacuum leak. 4. Engine oil leakage into exhaust-valve guide seals, piston rings.

My first thought was that this was related to the work I had just had done, so I called the mechanic and he said...oh..that means you need a new catalytic converter...bring it back and we'll have it replaced.

I would like to know what your opinions are and where to proceed. I found this forum when I did a search and a post pulled up for a 2000 avalon with the same error code. He had his erased and it did not return. Shall I have the code erased and see what happens? Get the CC replaced? Take it to the deaership for a diagnostic test?

Also, if you have any suggestions as to a mechanic or shop to take it to in the Phoenix, AZ area, I would appreciate recommendations.

As much as a cat cost, take it to a dealer for a second opinion. It's more likely mechanic did something to screw it up. He was in all the right areas and it's real easy to put a vacuum hose on the wrong spot and cause this very problem. That or put the wrong plugs in and cause a small misfire, etc.
Whoever you take it to, give them the full history so they will dig a bit deeper then just what the computer says.