I've been thinking of doing the same for my '96 965, which may need the head gasket replaced. There are two 960/S90 cars in my area (NYC metro) for sale in $400 to $1500 range with claims of good running condition and mileage less than 150K. I'm considering this option because I know I can swap the engines w/minimal problems. But messing with the head on the 2.9L six intimidates me.
BTW, one thing I'd look for is a car that failed state inspection for bad parking brake. The labor cost on this repair is so high that an otherwise solid car would be priced very cheap.
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