Allright cheers for the advice. Sounds like the consensus is that it is risky trying to fix the engine as it is probably buggered and my 2 options are either scrap it or buy a second hand engine. Not really what I wanted to hear but oh well haha.
I'll only get about 300 NZD for the wreck. I guess parting it out is an option but I can't really be bothered.
So that leaves me with getting another engine. There aren't any EJ22s in the country according to all the wreckers I called. How bad an option is an EJ20? I can get a sub 200,000km EJ25 for 450-600NZD depending on mileage. My main concern is that a similar mileage EJ25 is just going to have the same problem. How likely is it to happen to my replacement engine? If I did the head gasket on a new engine as a precaution it would probably cost another $500 pushing me to probably at least $1500 for total repairs. I need new tires and brake pads soon so that'll take me to pretty much the value of the car. That's probably not worth it.
If I got a second hand EJ25 from a wrecker what other parts would you recommend?Obviously I need to do an oil change and new filter. My water pump probably needs replacing too. Anything else?
My other batshit crazy idea is to chuck in a twin turbo EJ20 with manual transmission just for the laughs haha