Need advice - blown head gasket

[Hornbus]

So we tried to take the HornBus to the Longhorn's game in Nebraska. We made it from Austin to Wichita before we blew the head gasket - maybe more accurately, we had a leaking head gasket. Hornbus is still hanging out at a truck spa getting some work done. For background, here is what I know about the bus:
Engine - 7.3 international
Head gasket is leaking
Heads are cracked, but repairable.
Top speed - I've never wound it all the way out, but at about 55 mph it is running at about 3300 rpm.
Speedometer is broken, 55 registers as 75 ish.
Miles - who knows, but it is at least 200k.
Built - 1977
Transmission - 3 speed automatic. Wish it had overdrive!
Length - 3/4 length
Body - is in great shape. And, I have a ton invested in the paint job (way more than I paid for the bus)

Here are my questions:
1 - The head apparently can be repaired. Is this a good idea? The mechanic I'm working with seems very familiar with the engine and feels confident it will work. Otherwise he is recommending finding heads somewhere used.
2 - should I be considering an engine replacement? If so, what is a good replacement for the 7.3?
3 - I am looking at getting a new rear end with better gear ratios to improve highway speed. Anything to keep in mind?
4 - any other (reasonably priced) options to improve highway speed? We want to be able to take the bus on the highway for long trips.
5 - would there be a substantial benefit to replace the whole drivetrain - motor (turbo diesel, transmission, rear end)? What would something like that cost?

Anything else anyone can think of would be welcome.

Hook'em! And, I will post pictures once I get off my mobile.

[frank-id]

Sometimes it is cheaper in many ways to find a replacement engine. Used heads are only about $100 each. Good complete engines with 150K miles are about $900- 1500. I just had some valve work on a pair of used heads. I paid $1200 and the workmanship was terrible. Changing to a modern powerstroke is very expensive. The 7.3 is a good engine but lacks power. Power can be increased but the upgrade costs money. Ideally, finding a low millage Ford or Int truck with a 7.3, turbo charger, and a good e4od trans for about $2-2500 is a good deal.
Running a 7.3 at 3300 rpms is at the top end of engine speed, as max rpm is 3500.
The ideal rear axle ratio is 3:55, but ya gotta have some horsepower or do lots of shifting. I recently bought some new gears for about $1000.
My Blue Bird by Int is a great bus. I broke my heads going up a long steep hill and a coolant hose to the rear heater broke. My BB is a 1991 and was a good runner. I should be drive this bus in about a week. Frank in Idaho

[frank-id]

http://cgi.ebay.com/ebaymotors/ws/eBayI ... MEWAX%3AIT

[Hornbus]

I'm somewhat committed now to a head replacement. Guy has done the work and determined that the heads are cracked beyond repair. His Opinion is that the " bottom" is in great shape so he recommends just replacing the heads. Since he has done half the labor, I guess I'm going with the head replacement.

He is also looking for a new rear end with a better gear ratio. Anything to know about that before the work is done?

Btw - Frank, I wish I had seen your post about the 7.3 used engine sooner. That seems like a pretty great option.

[Hornbus]

I can't figure out how to upload pictures so I attched a URL link to the bus. If I can't work out pics I will create a photo bucket site and link that.