For a car of that price and mileage I would do lots of checking to see if there was internal damage to the engine - excessive blowby, water/oil mixing, signs of overheating, valve or bearing sounds, etc. Those things wouldn't be worth repairing (if even possible to repair) on an engine that old.

Add in the cost of your labor and parts for the problems you've already found to the price and maybe you'd be able to buy a newer car for the total $ you come up with.

I would be more concerned about the history of the particular car than any statistical concern about 850s of that year.