Good job. I bought my E320 in the same sort of shape with a blown head gasket. I decked the head and it ran for about a month but had tons of blow by and I just swapped the whole engine. I have a hookup for parts cars here and paid $300 for a engine and harness delivered.

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Current fleet:
1995 C36
1989 190E 2.6 5 speed
1974 450SLC
1988 5.0 swapped Supra