Mate,
I had a similar problem with the XJ6 Jaguar. The liner slipped because the block was cracked between the two centre cylinders.
The car did not normally overheat until a hot day, then it boiled!
I had the engine rebuilt with capped liners, which ended slippage and cracked block syndrome, as the head sits neatly on the liners.
If I was in your situation, I'd fit the 4.6 motor :D
More guts and probably less fuel. If you refit LPG, go vapour injection, or it may all hapen again.
BTW, a good low km 3.9 V8 can be bought for under 2 grand and that IS the cheapest option. Even if you take the heads off and check it out before fitting.
Gaskets are cheap :D

