Well, I can see the problem from here, and I'm hundreds of miles away.
Someone stole your pistons! It won't run without them.
Really, check the 'sticky' at the top of this section...
......................................2.0........ .2.3 Early....2.3 Late.....2.5
Bore...............................3.520........3. 780.........3.780......3.780
The bore makes the difference, and you should be able to tell 3.5" from 3.75{thatza quarter inch more or less}.
I would not put money into a 2.0, but I'm be likin' smore power & torque, at the cost of a few bits of fuel extra.
Locally, you can get a complete 2.3 for ~$400, and newer ones cost more, such as the 2.5. Getting a used engine of that vintage is significantly less expensive than parts & gaskets and machine costs to repair an older one.
Two piece seals are as follows,{from the sticky}:
Rear main seal changed from a two piece to a one piece design in ’86.
Go poke around here:
http://www.therangerstation.com/forums/showthread.php?t=9
for the full montie.
tom