1986 M1008 - Bad Engine

[tonkasal]

My truck started making noises when acceleration was lifted (coasting) it gradually got worse. I found the fly wheel was hitting the maint cover. I thought it could be a bad torq converter but after checking it seemed tight and okay.

I took it to a transmission shop, and they are telling me the engine is bad and spun a bearing.

I'm not sure what do do at this point, any suggestions or thoughts? The old 6.2L is a dog and if I have to replace it, i wouldn't mind going with something newer with more power and efficiency. Has anyone dropped in a new modern engine?
I'm in the the Atlanta area, does anyone know of any shops in the south I could look into?

 

[country]

We have test fired 6.5 drop in engines

HM-1243 | Diesel Engine GM 6.5L Non Turbo HMMWV
6.5 Liter GM Diesel Engine (Non-Turbo) for HMMWV Truck Variants
NSN #:
Price: $2,350.00

 

[nyoffroad]

I wouldn't take a tranny shops word on a bad engine, from the few spun bearings I've seen the engine locks up and dosn't continue to run at all. You said the converter is ok but did you check for cracks or loose bolts where the flex plate bolts to the crankshaft? I'd put money on that.

 

[tonkasal]

I checked em, the flex plat has no cracks and every bolt is tight to torq specs.

 

[doghead]

Drop the oil pan and have look.