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Compression is good initial, but leak down test is what is needed now. The oil trick is only to determine condition of rings. Which you know are toasted. The question is what is each cylinders psi compression? Is there only one at 60 psi? Are they all within 5-10% of each other? High low...

That's robbery. Surplus (Nos)units with out core are that much. There's a place it in Oregon that rebuilds them for 600ish.

find a local heavy diesel shop to rebuild it... shouldn't cost a third of the going price for a new one. I wouldn't advice rebuilding them yourself. they require some special tools. I've resealed older German, and Japanese IP's (the seals degraded from low sulfur fuel), but it's a little more...

Flashing wait light, bad glow plugs or box. Your box is perma fried.