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Again as already mentioned, contact Justin Cooper (he is the only mechanic in Tas right though???? :p:p )
The last 300tdi engine I picked up for $1200, it was out of a Discovery one, so I changed over all the Defender bits to make it suit, plus labour for me to install it. I generally dont make too many comments about what others charge, as I dont know their hourly rate or such additional costings as freight etc.
But I would suggest you can prolly get a better quote than $8K.
Regards
Daz
depending on where the crack is you might be able to get away with an overbore and dryline sleeve.
Ive done it to a 2.25 before and the meat in the tdi isnt that dissimilar.
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The above mob do a 300tdi conversion from 2.5l to 2.8l
From vague vague memory it is quite a solid overbite that is then dry lined and then a longer stroke crank. If you had a good machine shop in tassy then it might be a way forward to save the block?
Else finding a donger D1 will likely be the cheapest way to get a serviceable block...
S