I don't understand a couple of things:
* why is the engine so expensive
I am almost 9 months in Europe and had many many opportunities to buy whole diesel Land Cruiser for around 2200 dollars. I didn't buy that as I have some other priorities right now. And honestly, I don't understand diesel engine at all. It took me a substantial effort to learn the engine I have. But 7000 US dollars just for engine is really high price.
* replace timing belt, water pump, BEBs
This can't be that expensive either, I would say around 2k dollars.
The problem is when you buy a new crankshaft, pistons, g-turbo, redo IP, injectors and other stuff. I still think that this project could be done much cheaper. I quoted a shop in Germany which specializes in Land Cruisers (
Tom's Fahrzeugtechnik) and the quote for engine swap from 1FZ-FE to 1HD-T was 2000 EU for labor. That was only for taking the old 1FZ-FE out , put 1HD-T in and do wiring and all the magic.
True is that prices of diesel Land Cruiser is going higher and higher every moment, my friend who was getting Land Cruisers from UK to be parted out in the Czech Republic was buying nice Cruiser's for 1700 GBP with low miles. Those times are passed and people want around 4000 GBP for well-maintained trucks. Still, it is possible to find a cheap one.
The place to look is obviously UK, the tax scheme is now very harsh on the owners of big diesels so people are getting rid of them, most of the cruisers also don't have MOT (technical inspection) which takes the prices lower.
Prices in Germany, Belgium, Netherlands, France (which are the biggest market in mainland Europe) are high.