If you really love the rest of the car, I'd find a donor engine, make sure it has a good compression and cylinder-leak-down (and coolant leak-down) test results, and then drop it in.

Sincerely,

PE

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83 240D - 4 speed manual - Manilla Beige
189K miles, Tachometer mod, cool wooden shift knob from PeachParts, CocoMats, Original factory paint, manual windows, manual sunroof. Starting to add AudioWrap to this car too!