A rebuild is going to be WAY cheaper than a swap. Especially if you are having someone else to the swap. I believe the costs for an R2.8 swap is $25K plus and that's on the low side for having a shop do it.
I'm agreeing with the head gasket probability....and provided no damage to pistons (I doubt) possibly a couple push rods and a lifter and new head gasket. Get the head rebuilt since it's off and for a few thousand someone else should easily be able to get it back running and read to roll for years and years.