Looks like you've got a lot of nice parts already invested in the engine that are worth keeping. My bet is most are still fine. You won't know what to do until you get the heads off and see what sort of failure you're dealing with. If the block, crank and head is ok or salvagable you're looking at a pretty simple rebuild. Worst case is a new block, head, crank and piston, but probabably not all this. With some artful scavenging and a little luck you can probably get it back together for less than $1500.
