Sounds like a case of the head gaskets.
Yeah can, get a good short block w forged rods and pistons for 2.5-3.5k. Depending on the builder. Another 1-1.5k in misc parts. I am anal so I'd put all new parts on a built motor.
You have yourself a solid 475-500hp capable motor. Considering you do the work yourself.
Otherwise you are at the pitty of crappy machine shops that chase you out of their shop w a cam shaft for telling them that they do half ass work.