Tell your daddy a new motor is WAY less expensive than if he would have bought you that BMW.
You should really go through the entire engine. Sounds like you've had a lot more problems with that car than most of us do.
Anyway, before you make any performance modifications you should replace the rings at the very least. Since it's got triple digit mileage on the engine, the bottom end is probably wearing (alhough still good I'm sure), you really should do it all at once, or you'll wind up doing it again too soon down the road.
My advice? Crate motor. You should be able to get a nice one for WAY less than $3k.
Plus you should be able to get some cash to apply towards it by selling your old stuff.