New head is $1500 to $2000 bare, you will also want some new tappets and maybe some new valves if any are too worn.

No way I'd put that head back on, for sure it's cracked or badly warped, and if it has been overheated, it's cracked.

Offer accordingly -- price for an 87 300D in good condition, less than 200,000 miles is about $6000, give or take a bit. Deduct $2000 for the head, and more for any other problems.

Peter

__________________
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!