[ QUOTE ]
OK here's my .02,if your going to have to go in there you are probably looking at a total disassembly. You need to have all the rods and Crankshaft checked at a reputable machine shop. The problem is with this amount of miles is you may get by with rings , bearings , replace the bent rod if in deed this is what is wrong and a valve job. The flip side is you won't know the extent of the rebiuld until you get in there. The machine shop should be able to get you a rod, if not let me know and i can get you one.This so called mechanic should have his rear kicked for telling you to do the rag thing and in my opinion he should be assisting with the problem possibly by paying.
[/ QUOTE ]
Ditto what steve said.
Several of us have been in the same position. Complete rebuild, expect to spend 5-7k just depnding on what it needs.
I did the used engine. Picked one up at a local yard, tore it down (which voided the yard warrenty, but no way I was putting it in with out knowing the inside condition) for inspection a little of this and a little of that and all turned out ok. With all the extras I did, about 4k. Of which 700 were head studs. So used engine with good core, I have seen them from 900 to 1900, just gotta shop. Short block from IH, 4k.
We do not know how well equiped you are as for tools and space and what skill level so hard to point you in a direction.
The lower end of the PSD is very stout, can not imagine a tee shirt bending a rod but have seen stragner things happen.
Best adive I feel comfortable in offering, pull the engine out, pull pan and have a look. Pull heads and measure piston height above deck. If any of this is new to you, then 4-7k taking it some where.
I hope it turns out ok for you.