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One thing I would do is a compression test to check the health of the motor.
If the results on that are good, then if everything other than the engine/transmission is working well (brakes, suspension, etc) and you put 2k into the engine/tranny (I'm assuming a new transmission and some gaskets or seals to get rid of that oil leak)... That'll put you at 3,500 for a car that runs well. Even though the body may not look all that nice, I'd say it's not a bad way to spend 3,500.
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