Hi Nandomed
The blue smoke tells you that you have piston or broken rings wear, it can be gas guides. The cost of repair depends on the mechanic, there are those who receive an engine and immediately program rectification of parts to ensure success in their work, do not risk based on their knowledge. In this case, think of piston rings, connecting rod caps, bench and thrust, complete general packaging, possibly some balineras. You would have to measure cylinders, if wear and/or oval are within the limits, they are, measuring connecting rods and bench to see if they are inside the tolerance, the same as the valve guides, these rectifications are the part that most more expensive, normally these engines are of very good material, resistant to wear. On the other hand for the change from machine to a diesel you must also think about the box since these engines are slower and you will not give you the working speed of your current box.
I hope I have been useful with the comment. Luck.
Miguel