Cost of engine rebuild...what should I do?

I appreciate everybody's input...all tests were done to try and bring the emissions back in but they were well out not just too high!!
I've had genuine cats fitted only a couple of years ago with every possible conceivable item thrown at it..lambda sensors repeatedly.. all cleaners to try and clear up the emissions. The head gasket isn't the issue here it's the fact that the head needs to come off to diagnose anything untoward and replaced so there's best part of £700 before anything else!!
I haven't got anywhere to store it at home until another recommended party is able to look at it as I know it can take months due to their popularity.
As the garage said they are happy to do the work and I'm happy to pay for it if I thought it was a viable option but the rest of the car is going to need some sort of restoration following on from this and there comes a point when you have to weigh up your options!

Just off the top of my head there's a full leather interior, x4 decent 16"alloys with x4 toyos that haven't done more than 6-700 miles! 4 pots only a few years old. Spax adjustables with H&R springs.. 4-2-1 ,matching hardtop loads of history, just paid £450 for the failed mot, full service lanoguard top up etc..so if anyone wants to take it as is please do so but it's off the road due to the failed test so needs towing!!
This is gutting but I need it gone before I really consider my next option!

Unless there is evidence to suggest otherwise the engine itself WONT be the cause of your problems, the cause will be peripheral. The bloke who does the work on your car may well have missed something, it happens to the beat of us! Which is why I suggest a fresh set of eyes, some times you can't see the wood from the trees.

Now the rust etc is entirely another matter and I can't help you with that part of the decision from afar.

But do you intend to replace the car with another MGF/TF?  if so I'd hang on to this one and swap over any desirable/better/new bits over to it's replacement. before unloading the current car. Yes I realise space may be a problem but it is a short term problem, that requires you to find away how to swing it.

It's not how many problems or how big those problems are, but how you go about tackling them that defines you.

I can't really get a fresh pair of eyes to look as it's now at the garage we're the work was going to be done and I for one haven't got the cheek to let somebody else rock up at somebody else's gaf...that's the upmost cheek I reckon. It's about 25 miles from home so any movement would have to be on a trailer so not sensible really!
The rust is the problem as welding has been done for the last two MOTs so it's in the car now so the problem is do the engine work could be easy could be a right pain in the arse but then the car falls to bits in a couple more years and I'm finding it hard to justify the expense when the cars worth about £2k when fully fit!
I may be getting another MG possibly but not right away so the storage until I do may become a problem!

You can't drive the thing home and deal with it from there? Why the need for a trailer? Is it going to self destruct in 25 miles?
I doubt that every test possible has been used in diagnosis, Does the garage have a Pscan or a T4 Testbook? These are the OBD diagnotic tools dedicated to our cars, or is it just some generic OBD scanner, the effectiveness of these can vary wildly, even the good ones may not have to optional software package for our cars required to do anything more than the most basic stuff.
I realise that you lot have an entirely different perspective to distances than we do In Oz but here 25 miles is just a trip to the shops!

I'm not giving you a hard time, just for the devilment of it, but I am asking hard questions so that I may be better able to help you.

 

Quite simply it has no Mot so can't be driven on the public highway...last thing I want is to have it taken off me with no valid mot- insurance not valid it will be crushed then and I get a fine!!

What there is no provision in the legislation for driving a car to and from the repairer or MOT station.......What a backward uncivilised country!