If you need engine work and have the cash, take it to a mechanic, but if you are like myself, a)financial strapped, b)mechanically inclined then I would rebuild it. It's a good learning experience, frustrating at times, but man the outcome is awesome. Also hit your local scarp yards for replacement parts.
As for a lift, im in the same boat as you. There are a few places online that have 3" lifts for the pathy of that year, some of the suspension lifts are pretty easy(so i have heard
), but the costs start around 1k. There is always a body lift for around 200, but im not sure i wawnt to do that, or not just that
best regards, and love your pathy