380 SEL worn camshaft and rockers

The Mechanic "DR. Benz" who has been servicing my recently purchased 380SEL for several years says that my top end (Cams and rockers) is completely worn out!! Says this is why car is running rough below 1500rpm.I can hear some valve train noise but I cant understand why it runs so smoothe at above 2000 rpm!! He said he advised the original owner about this a few years ago and refused to stop "patching the car" if the owner didnt let him do a top end job. He advised me I would be better of letting him install a used engine for around $5000-6000.
I have run a compression test and all cylinders come back over 160psi. Engine has approx 300,000miles.Mechanic says that if heads are removed the bolts will pull out the threads? Says he will have to re thread block etc.. Very expensive. Is he just wanting to sell me an engine or can I do a top end job along with timing chain etc? Is there a detailed repair manual available and if so where can I find one? I think maybe I can have the heads reworked and be ok? Possibly get by with a camshaft and rockers. What are your thoughts? Thanks.