JBLegacy

I bought my 1st Subaru this past december ('12) with 220,000 miles. ($4300) I had it checked by my mechanic and didn't have any major problems, other than timing belt had no record of replacement. I had the timing belt and water pump replaced. ($1000) I changed the oil in late dec with no issues present. mid january I overheated. assuming I had just lost coolant, I refilled it and continued driving within a few days it happened again and I took it in to my mechanic who told me I had a leaky upper radiator hose. I replaced it that next weekend (3 days max) and after I was done replacing it checked my oil. I saw a green tint and a slime that I have since heard called a "milkshake". I grounded it and it has sat almost 2 months. I have endeavored to replace my head gaskets. I have removed everything above the engine block and removed the dual exhaust below. I drained my oil and it was terrible. it really did look exactly like a chocolate shake. I'm at a decision point and I'm looking for advice. I really can't back away from this car now, I have to much invested. I can either continue and replace the gaskets like originally planned, but I'm afraid I ruined my bearings due to the overheating with bad lubrication. or I could spend the $2000-$2500 to have my engine bored out and have the gaskets replaced or I could find an engine like this one http://www.gearheadengines.com/CrateEngines for $3300 Any advice?