The reason I suggested to swap the engine is that they are not to expensive.
A rebuild head with new gaskets and probable a water pump will cost you more.

Las year I had suddenly problems with my 300SE (1989), loss of power, hard starting both on LPG and petrol. Since the cart is a real high mileage (400k mls) I just bought a good used complete engine for € 250,- from a 1991 car.

With the new engine noise is less, performance and fuel economy are up.
To get these results from repairing my old engine would have cost a lot more.

Rob