Help! Engine crisis 83 300D

Hello, I'm new to your discussion. I could use some insight and perspective to make a decision. Can anyone help?

I'm on my third 1983 300D. Great cars. My first was totaled by a drunk @ 180K; it's replacement is my daily driver and now has 250K (I commute 1K/week).

I also bought a near showroom specimen from the original elderly owner in 5/99 @ 52K. I paid top dollar for the car. My wife drove it until the water pump failed @ 75K. She didn't realize it and drove until the engine siezed. We got it running, but it belched copious blue-white (oil) smoke and is basically undriveable. It has been in storage for a year.

I called my VERY reputable mechanic and his take was that it probably had at least ring, cylinder wall and head damage. The only best option was to replace with a factory rebuild. His cost for rebuilding the engine in the car would be nearly the same. A sizeable investiment in a car I already have a lot of money in.

I use another tech from time to time, who saw the car & got it running. His suggestion was to rebuild the engine in the car. Again not an inexpensive proposition.

What do I do with the car? Installing a factory motor with a warranty means that I basically have a new car. This, however, also means nearly paying for the car again. If I rebuild or look for a salvage, I can save some money. But is this cheaper in the long run, particularly for these cars? Where can I find salvage engines? This car is in exceptional condition otherwise. I want performance up to spec and that matches the car's condition.

Is the money better spent otherwise? What, then, do I do with this car? How much of a financial beating would I have take and how would I find a buyer? I could continue to drive the one I have now, but eventually even it will wear out with the kind of miles I drive, so I'll be looking for a new car in a year or two.

Some objective help would be appreciated. Thanks.