[ae1969]

Uhmmmm if it has been sitting with mixed oil/water in the block for a year.......... it is not of a question of will it fail......... its more a question of when.

I would pull the engine.......... an minimally I would replace the rod bearings. Although the mains are quite tough on these cars. No bearing enjoys moisture.

Uhmmmm if you do the work and all the engine tolerances are in spec........ and you do the work.... ~1000 in parts to clean things up nicely...but then you will probably want to switch the water pump, belts, rollers.........all the seals for the turbo. etc etc etc.... $$$$