My Sis-in-law (who lives in So Utah) has a friend who recently purchased a 91 350SDL (without consulting me). Had it 3 months, had to put a new turbo on it (this already makes me nervous) according to some mechanic. Don't know the reason.

Don't know the mileage.

The vehicle currently has no oil pressure according to my sis-in-law. So I know the gauge needs to be verified. I know about all the rod and head problems. Lets assume it needs a new engine. What is the killer application?

New factory short block?
New factory long block?
Rebuild and just replace with updated rods, rings, check head etc.
OR find a good used 300SDL engine?

I don't need a long explanation, I can find appropriate links using the search function. Just the short and sweet, thank you in advance.

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84 300DT Puke Yellow. Totalled after 438,000
84 300DT Orient Red. 169,000 (actual mileage may vary)
2002 Explorer EB (wife's)

Your questions regarding the "killer application" cannot be answered in a one liner.

There are many variables to consider when attempting to repair/replace this engine including who is going to do the work to repair/replace it.

If you are doing the work yourself, in your own time frame, then you can probably rebuild the existing engine yourself, including getting the cylinders bored, if necessary.

However, if you are going to have an unknown mechanic do this work, then it would be far less risky to purchase a new short block for it and keep the existing head (very costly) or purchase a brand new long block for it (too costly ). My personal belief is that it is far too risky to allow an unknown mechanic to rebuild one of these engines unless he comes with a ton of references with regard to rebuilding a 603 engine (not likely).

The least expensive alternative, although not without some risk, is to find a decent 603 (3 litre) from the 300 SDL or 300D (1987). If a decent engine can be located and suitably transported, with some kind of warranty, then the risk of this approach and the cost of this approach makes it probably the best choice.