diesel... good luck. They are not very available in the boneyards. Give having your cylinder head refurbished or getting a re-man cylinder head if your short block is in reasonable condition. Things to check, IMO, would be compression and whether it is good 'dry' or with a dash of oil put in each cylinder to gauge ring condition, and oil pressure using an actual gauge, cold @ idle, hot @ idle and running at highway rpms, and finally how quickly does the pressure drop to zero after shutdown. Those should give you a reasonable gauge about ring and bearing condition in the short block. You could even have a leakdown test done if you want to get an actual number on ring/cylinder wall condition. In many cases, the 'bottom end' of the engine is fine, but the cylinder head problematic.
I expect a lot of E's have gone to an early retirement due to this fairly common problem. People just don't want to take the time, and would rather be in debt for 5-6-7 years on a new vehicle than have a few months pain on the CC and have a repair done. Their choice, but if the rest of the vehicle is in good condition, seems to be a waste to retire it prematurely. My newest, Mariner, is a 2007. FWIW.
tom