And yet I can sit here and tell you stories about "reputable" shops telling people to **** (present company included... F U Jasper...) when it comes to issues with their "rebuilds" within warranty.I agree with Celticlady 100% here. Salvage engines and transmissions are a crapshoot - I've put 3 salvage engines in other vehicles and 2 of them failed within a couple of years. I rebuilt the original engine in my Liberty and it failed within 3000 miles - turned out the machine shop I used did not grind the crankshaft straight. Go with an engine rebuilder that specializes in these engines (and understands the valve seat issues) which will give you the best odds of getting something that lasts. I also agree on the local transmission shop - I've had bad luck with buying rebuilt transmissions from outfits that churn them out - probably low paid, unhappy employees who don't care about quality of work. A reputable local shop working on a transmission you know is already fairly healthy sounds like the best way to go.
Also, invest in a complete new set of coolant hoses, new radiator, coolant reservoir cap, thermostat and water pump - I bet the most common reason for "new" engines failing within the first few years is due to an issue with the old cooling system that causes overheating.
Sad fact it, no matter what it's still a crap shoot.