Oh dear! I hope you've got plenty of tools as you will need them!
Re the cooling system, you should check the small pipe that goes from the thermostat housing to the header tank. It joins to a plastic three-way widget that can easily get blocked-up. The one on my white 300TDi was blocked solid with either rust or radiator sealant. It was plugged for the full length of the pipe stub, almost an inch. I had been running fairly successfully by loosening the brass plug on the thermostat housing and tying it with string so it didn't get lost. With the thermostat removed and K-Seal in use the heater worked OK. In general as long as the heater works you aren't hurting the engine but if the heater goes cold you may have a big problem. When the head cracks you will need a new one but note that the bare casting type at about £230 is only semi-finished. This means that lapping-in the valves is not enough, the valves must be recessed below the surface of the head. On a petrol engine valves sunk below the head joint face would be regarded as "pocketed" which is bad and causes power loss. On the 300TDi the valves have to be pocketed by about 1mm (check the dimensions yourself) This letting-in of the valves is called "stand-down" and if it is not done properly a lot of problems will occur. Valve caps will wear and break and the rocker shaft may break or be torn from the head. Good luck!
