300D Blues

Well I can't believe I have to say this, but my '81 300D just got assessed and the engine is shot. Apparently the oil pump failed and it ruined the rest of engine. Needless to say, I am hearbroken but trying to make some smart plans and need some sound advice. I love the car, and am willing to have another engine installed, but wanted to see if anybody has any suggestions. The car is slightly rusted, mainly surface, was running great until this, interior is spotless, and the body needs some routine maintanence. I actually paid $500 for the car a few months ago, and have been trying to find a decent price on another engine since yesterday. The best so far that I have come up with is a used engine with 150K miles for $850. Does anyone have any suggestions as to where I may find more around this price range, etc.? Any advice would be helpful!!!!