250 six banger- repair/replace, or?

[68isgreat]

After getting this rusty 68 short stepside recently, with the original 250 six and 4 speed, I put about $600 into replacing all the tertiary engine parts to get it running. New distributor, coil, wires, plugs, alternator, fuel pump, carb, etc (not shown in the pic below). I got it to run, but it was really rough, with white smoke out the exhaust, and would barely idle. Original 4 speed works great though. Checked the dipstick and the new oil looks like chocolate milk, so I'm assuming that's a blown head gasket. Not sure what route to take next. I could just put a new gasket kit in it, but who knows what shape the bearings are in, etc. Or, $2k for a full rebuild, which would keep it original. Or, $500 for a used motor, but who knows what problems it would have. Or, $2k would get a nice used small block, but then you need new exhaust, not sure if the motor mounts need changing, etc. etc. Heck, I've even thought of putting an electric motor in it, since it's just going to be an in town rig, but that gets spendy in a hurry also.

I'm leaning towards rebuilding the original six. They are great motors when running well. For those of you who have been down this road before, what do you think? Good idea? Bad idea? I'll be taking the front clip off soon so I can start work on the cleaning up the frame, which will make engine removal much easier also.



p.s. - you'll note in the above photo that whoever put these wires in has the firing order wrong. Yes, I changed it to the correct 153624 firing order, made sure the rotor pointed to #1 at tdc compression stroke, etc.