Was this a private party buy or a Dealership? That really sucks ass and im sure who ever sold it to you knew that was an issue
Anyway you can get this thing rebuilt for well under $10K if you do most of the work yourself well under $4K
You can get a assembled new short block for very good prices just check the vendors on this site. and you might even be able to find a complete longblock ready to drop in.
YOu seem to have the process down right and im sure you will make this red beauty a beast