yeah man, go grab another 4.0 ohv from a 93/94 model and throw it in there. for the amount of money you'll spend fixing this motor, you can be riding out in a weekend.
if these motors are taken care of, and properly maintained, they'll go the distance. i know of at least 10 people with first generation over 300k, i myself am around 266k on original equipment (save alternator).
if you have a pullpart nearby, i recommend there. you can get a warranty in case anything in the engine doesn't work right, or is blown you can just exchange it.
good luck