An engine drop shouldn't be too hard. I'm not a mechanic, but I helped a friend with his 3400 (basically the same) and it was a piece of cake.
Money wise it seems dropping one in would be the smartest bet, depending on the condition of the car. Getting something new will easily run you a lot more.
Have you priced an engine yet? They can be had for under $400 with a fair amount of miles on them.