Yes, the current engine has a blown head gasket as the only issue. Just looking at options to save money/time.
This won't save you money, but it will save you time: take the $1,000 or so it will cost you for a new engine shipped to your door, plus whatever other money you plan to spend on the removal and replacement of the current engine, and drop the cash into an empty coffee can. Sprinkle lightly with gasoline, light a match, and voila! You get the same result, but it takes only seconds, it saves you the bloody knuckles and frustration, and it's lots more fun.
Or you can buy the head gasket replacement kit from Will Tillery as referenced above, download the RAVE technical manual for free, tap into Discoweb's wealth of knowledge and experience of people who will be happy to help you through the project, and replace your head gaskets yourself for a fraction of the price and less time than replacing the entire engine.
It's like a rite of passage of Discovery ownership. It's a big project for first timers, but it's not hard. Less committing and easier to do than an engine swap.