A smog station does have the right to refuse to smog test a vehicle if they feel it will be unsafe to do so. In this particular case, due to the added load which will be placed on your engine during the dynomometer portion of the smog inspection, a smog station does have a legitimate concern that more engine damage may occur as a result of the smog check.
You can continue to seek a smog station which will conduct the smog test, however without an inspection your vehicle will not qualify for the vehicle buy back or retirement program. The program is designed to reduce the number of polluting (but able to be regularly driven) vehicles off of California's roadways.