I wouldn't rebuild the engine.
I've done it with mine, because the engine had 26K miles, and the lowest mileage engine I could get 2nd hand had about 55K, and because I was expecting to get it done cheaper than I did. The cost of rebuilding mine was about 4K, but the damage was less than in yours (head work, 2 camshafts, chain and some valves). The rest was gaskets, screws, AOS, RMS and other bits and bolts. My failure was due to a worn tensioner pad. The AOS was starting to go, and RMS was cheap because the engine was out. For a little more, I'd get a 3.2 engine. In Portugal, a 98 2.5 is still worth about 16-18K, not the 5 or 6k it's worth in the UK, so that's the main reason why I didn't sold the car.
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