Rebuilding and engine can be very expensive, you never know what you are going to find and many times those additional items come out after you already spent good money on it.
If you have the tools and knowledge, remove the valve cover,check that all valves are working and closing properly, look for something that could explain the low compression. If you find nothing, you could remove the head and swap the gasket (although there is no coolant/oil contamination). That would be the most I would spend on it.
I would never spent $2k on a $2k vehicle, even more when you do not know if it is going to run right at the end. Your 6 needs a lot of work from what youíve described.
You need a reliable vehicle if you are commuting 50miles/day. If the head gasket doesnít do the trick, cut your losses and get a basic but newer low mileage car that runs good. Look for those that donít haveAC or power windows, they are cheap because nobody wants them but not because they are beat or have something wrong.
Yeah, you probably aren't wrong... That's just hard to swallow. I'm fairly positive it isn't an issue outside of the engine assembly. I've installed upgraded COPs and fuel injectors. I believe I have good fuel pressure, though I concede that I haven't verified that with the gauge. I know I have good ignition. So I'm pretty sure it's just lack of compression. Head gasket would be a waste of money, but I'll try to disassemble the top end tomorrow, weather permitting (no garage space, unfortunately, and my sleep schedule is a bit wonky right now so I need some sleep before I tackle all that).
Thanks for the comments.