I just rebuilt my engine with new head and cylinder gasket and threebond for £70 all in (plus fluids, 20hrs work and a bit of swearing and tool throwing)
It's definitely easier to buy a complete secondhand lump (£250~) if you can find one with a history you trust.
I reckon in this instance a 'new' frame will be needed as it's tricky enough getting the lump in and out of a straight one!
To be honest, If that was my bike, I'd be breaking it. :-(