Caroline,
I understand money is tight but rebuilding the engine and transmission is really the best way to go. Past owners may not have given accurate information so you really have no way of knowing what condition your car is really in. Watch the Sunday adds and pick up an engine hoist, I got a set with jack stands, hoist and engine stand for $129, was the best investment I every made. Taking these cars apart is actually very easy. Find a local machine shop you can trust, pull the engine and transmission and have them rebuilt.
I pulled my engine and transmission, called some parts suppliers and got all the parts needed for a complete rebuild. Took everything into a local shop I trusted and gave them the contact numbers for parts in case of need. Turns out the work was really easy, the shop was actually glad to have such an easy job as they were use to big V8’s and such. Took about 2 weeks to get it all back, $800 for the complete engine rebuild, and $400 for transmission. I had to put parts back together, oil pan, fuel pump, intake and such, but now I have an engine and transmission that I know are in great shape and reliable. I don’t have a lot of car experience and I am sure there are some things that I could have done that would have brought down the cost but this is the way I went with this project.
Just for cost comparison I also had a 2.8 V6 rebuilt With a C4 transmission, engine was $1400 and the transmission was $800. I didn’t have to supply any parts so that was a little easier and again I know I could have saved money on some of the work if I did more myself.
The key is to find a local place that you can trust and work with. My local shop said as long as I can get the parts all engine work is basically the same and they can do anything as long as the parts are available. I have AAA in case of need, but having rebuilt reliable components makes driving these cars a lot more fun.
Sharon