Not that bad at all. Ive done two engines in the last year (one for my Montero and one for my dads Ram 50) Get a new timing belt kit and water pump while you are at it. Use Gates or OEM (they are the same). I've also used Felpro steel head gaskets as they are the best IMO. I swear i found the head-gaskets for like $9 each on amazon. Look under Fel-Pro 9112 PT and see if they still have the deal going.

You have to pull the intake and most of the front off the engine as well as the exhaust manifolds. It should look something like this when you get her open.



Once you have it apart, clean it up, so you can see where you were blowing fluid. The cylinder that looks the cleanest is your best bet. Look closely at the oil and coolant passageways on the blocks deck. Any slight oxidation or pitting is a tale tale sign of where either your gasket, or your block allowed seepage. In my case the very center of the screen is where mine failed. I could have pulled the whole motor and sent it in to be decked, but thats a lot of work I really didnt need. I spent several hours sanding the deck surface with a straight edge and med/fine grit sandpaper. Then took some compressed air and blew out all my sand in the cylinders and put it all back. Both engines run great to this day.






Or just drop a 3.8L MIVEC in.