If money is an issue, (as it would be for me) I would condsider replacing the head. I removed the head after the chain broke on mine. I acquired the parts and had a machine shop recondition the head. I put it back on and the total cost was about $1200.
You could also get a reconditioned head and swap it out. Why do the whole engine?
'05 E320 CDI - 86,000 miles
'86 300SDL - 360,000 miles
'85 300SD - 150,000 miles (sold)
'89 190D - 120,000 miles (sold)
'85 300SD - 317,000 miles (sold)
'98 ML320 - 270,000 miles (sold)
'75 300D - 170,000 miles (sold)
'83 Harley Davidson FLTC (Broken again) :-(
'61 Plymouth Valiant - 60k mikes
2004 Papillon (Oliver)
2005 Tzitzu (Griffon)
2009 Welsh Corgi (Buba)