A very simple solution is to replace the block with a junkyard 3L block. Probably can do that for $500 and do the work yourself. Only a quality machine shop can determine the situation with your current block now.
Former owner of '99 CSVT - Silver #222/2760
356/334 wHP/TQ at 10psi on pump gas!
See My Mods
'05 Volvo S40 Turbo 5 AWD with 6spd, Passion Red
'06 Mazda5 Touring, 5spd,MTX, Black