I have done a few rebuilds of 12HT's, taking into account you mentioned its done 190k (which I don't believe by its condition) as its a 1987 model.
Looking at the condition of it and the amount of oil on both side of the block and on the timing cover (front seal gone) not to mention the rust inside the exposed pipes which would indicate to me the turbo would be in need of a full rebuild as well as there would be also the blow-by problem. Heater metal pipes have major corrosion.
Also, it looks like its already had one new water pump (shinny bolts), the engine is from a Auto transmission (no fly wheel) so I assume you are matting it to an auto again. Its a 30 year old engine and for the last 20 years know one has looked after that engine, you can see that, you need to strip it down and do a full rebuild.
I would have paid $1,400 max for it taking into account of the $1,250 rebuild kit and the $2,500 in labour and machine costs, IP service is if your lucky $360 and another $360 for injectors, and a new CHRA for the turbo $350.
Then you have the missing Pre Heat Time & the Fuel Relay Control, I see the VSV it there, also no power steering pump? and the idle up for the power steering switch on the pump (actuator is there), also Vac auto kick down looks missing as well, but depends on the year>
Sorry to rain down on you but you did ask...............do a full rebuild, do it right............do it once?