Dread4x4

Well i just found out today that my engine is probbly no good , took it to a buddys house to hook up all the vaccum lines on a 84 engine and he guy i bought it from had vaccum parts from 82-85 engines.... while we wer doing this we pulled the hose from the top of the exhaust cover off while it was running and it has massive blow by , is there anyway to fix this?

If not my buddy can give me a engine with a blown head gasket to rebuild. was hopeing on some input on what would be the best path.

Also in 4th and 5th gear , when i let off the gas pedal u can hear a real bad grinding type noise coming from what seems to be my transmission but im not 100% , any idea what that could be ?

And i need to change the BTDC settings back from 36 to 0 i believe is what it is suppose to be , anyone know how?