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As I am sure many after me will point out, 220k is barely midddle age for the b230ft. It definitley sounds like a "simple" blown head gasket. Personnally I would just do the headgasket, water pump and all belts. UNLESS I suspected issues with the turbo or the rear main is pissing like a hobo. But if you are gonna swap then you would be well served to search out a 93-95 b230ft(L Block). Longer piston skirts and the addition of piston cooling "oil squirters" seems to add longevity and makes the engine much quieter(no piston slap).
Matt
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