mabeastie: IMO, don't spend any money on the engine yet. Start by getting a new rad (or getting the old one recored if possible). Install it yourself. Next find a wrecker and buy a used fan and viscous coupling. Make sure the viscous coupling turns smoothly - if it is rough or stiff, pass on the unit. The better option is to get a pair of Flexalite electric fans in a new shroud which will fit perfectly inside the new radiator. Follow the directions for hook up carefully. It will take you (relaxed) weekend to install it yourself.
If a head gasket is leaking, deal with that after the vehicle is running again. If the engine has dropped a sleeve, you can pick up a used engine as replacement for way less than the quote you received. For $6k, you should be able to fix all your Disco problems and buy an old Toyota to use as a cheap daily driver - then you can pamper your Disco.
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