Stiddy, All- You can speculate all day what a potential buyer MIGHT say, or what you WOULD say. I can tell you what they DO say because we do more buyers inspections than I can tell you. Of course, we get potential buyers who are incredibally picky, like my very dear friend S2K. But those customers are not buying as many older cars, and expecting them to be perfect. Listen, I am all for keeping the very oldest 91's as perfect as the 04's we service, but we have to be realistic. I see cars like yours all the time, and when we discuss the situation with potential buyer, we don't involve emotional issues, and the age of the metals is irrelevant. As mentioned, I would do the t-belt and w/p, four cam seals and plugs, and both ends crank seals- all this assuming the engine checks out on the maintenance inspection. That is not rocket science. I can take a valve cover off and tell you how many oil changes a car has had by the staining of the alloy. You can believe that or not, but the fact is, oil leaves deposits behind which are only washed out with very regular oil changes. The longer these residues lay in a heated head, the less that washes out next change. And an over heated motor has a whole different look.
Back to the potential buyer- many, not all, but many end the discussion with, 'so it is a sound car none the less', and the deal is done.
Maybe you will loose a few, but your car will still be a viable commodity.
All that said, I see the following options still- the insurance company has still not located an LKQ motor, probabally because they are trying to stay in "network". These are the salvage yards on their approved list. Approved doesn't always mean quality, but rather time and price considerations, couple with quick internet or telex locator service. You have the option to work the phones yourself, and if you find the right motor, give them the details and let them buy it for you.
TI Dave has an excellant idea as well, assuming the 91 motor checks out, install it and keep the the damged motor- the ins co will probabally let you do this. Sellit, or rebuild it down the road. It should bring about 2500., which added to the selling price of the car X years from now, should brake you even.
There is no perfect solution, this is not a prefect situation, and certainly not a perfect world. We get injured all the time, we have to take the best recovery option we possibally can, and move on.
Bets of Luck,
MB