Here's my take: If you can do the work yourself, get a used engine and put it in. However, if you are going to have to pay a shop to do the work, sell it as is for whatever you can get. You'll pay so much in labor that it just doesn't make sense.
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... Saw this thread while looking for another issue ...... it is now December 2019, what was the conclusion to this story?
I'm the original owner to a 87 fj60 with 235k miles. A lot of 4 wheeling with 2 boys and adventure outings with Scouts and geocaching.
$8k to do an engine swap. Holee sheet. I’m in Vermont and have a local shop that fixed an exhaust manifold leak on my sprinter with the 5cylinder turbo diesel. They pulled the engine. Got the manifold off had the manifold milled flat replaced all the exhaust studs. Put on my new down pipe and reassembled and installed everything for $1000.