From what I understand about the m62 engine, you can't rebore it, as it has a coated liner and there are no oversize Pistons. You can change the bearings, but again not oversize. ( you replace crank with a new one) the heads are available secondhand. But again, the cam shaft bearings are not available oversize. The old days of picking up parts from a reconditioners, and assembling a 'new engine' are not catered for on this model. So, you should basically investigate, removing the heads, inspecting the bores for scoring, and either the bore score means find another secondhand engine, complete, or if the head is out of true, or cracked, finding another, and reassembling. You could be very lucky and just need new head gaskets. Especially if the engine still runs. £50 each I think.
You are talking big money, a secondhand engine used to be north of £1500, you should be trying to use a dismantler, that gives a garuantee, albeit, maybe 3 months. Whereas some will not garuantee anything.
Have you had the compression tested on all cylinders? With plugs out it will take an hour, and you might only need one side done.
Have you got white oil? Mayonnaise looking ?
I've heard of good repairs by changing gaskets, and rinsing through of sludge, and a few oil changes to get the engine clean. (With cheap oil etc.)
To reassemble the engine, you need a set of locking tools to line up the timing chains. These used to cost £400 but can now be found at about £150.
The engine is very similar to the bmw e39 m62 engine, but it's not the same. -but it can be adapted. There are plenty of mis-told stories on this subject.
What was the story of how the engine got to this state?
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