(Second attempted post... )

Melted fuel lines, burned cylinders, warped and cracked heads!
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I'm hoping for some general advice regarding my 1985 Vanagon with 160,000 
miles on her.

While driving back over the mountain pass at Grapvine north of Los 
Angeles last week, the water pump and belt appear to have gone, causing 
an severe overheating problem. Due to traffic and road construction 
conditions, I didn't pull over for more than five minutes until I reached 
bottom. Oxygen light and battery light came on. Heat went off in van. 
Temp guage slammed to the top. By the time I got out, smoke and steam was 
billowing out of the rear like a house fire.

When I opened it up, it looked mostly like pluming steam, though I 
smelled burning stuff similar to rubber. It took about five minutes just 
to be able to see the engine through the clouds.

Van was towed to a Bakersfield VW dealership. They have dismantled it, 
and just reported their advice that it needs a new engine. They feel 
rebuilding isn't worthwhile because the cylinder heads are blued from the 
heat, has a crcked head and a warped head. The fuel lines apparently 
melted at some point, so there are a variety of parts it would need. They 
quote something like $2,800 for the engine plus mix. stuff bringing it up 
to about $4,000. Also, brake master cylinder seems to be going. So I'm 
looking at something like $5,000 to bring this 11 year old, 160,000 mile 
vehicle back into its condition before this event.

Question is, is it worth it? I'm wondering how much more expense I might 
expect to see go out if the engine and water pump are replaced? Surely 
$5,000 is less than a new or newish second hand one. But then I hate to 
throw good money after bad. And I wonder how bad it might be according to 
others with vans of this vintage and condition?

All advice quite welcome, including approaches to solving this particular 
problem, engine sources/options, etc.

Thanks very much in advance.

James Cook
San Francisco Bay Area
California