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Driving back from holiday, trusty MU was running a dream as always (160,000km on clock), then suddenly an unusual engine noise and within moments the engine cut. Pull over to smoke coming from under the hood, open it up, a lot of smoke, even coming from the side of the head. Turns out no water in the radiator (although radiator not 'hot' - poured water in and eventually got steam as a result) - the radiator reservoir was checked a week ago, as usual, full. Oil in the engine bay. Let it cool, put more oil and water in, attempted to start but wouldn't fire. My much cared for MU is now in Ranfurly awaiting the mechanics to start work Tues (hoping they are helpful and good sorts).

How concerned should I be?
(translated, am I going to need to defer buying the other love of my life an engagement ring in light of potential unknown likely significant expense?)

if its got hot it will need a new head, and whatever else that caused the water leak at the start

Dang - the engine is a write off . . . . Bugger!

the cylinders are pretty tuff unless you siezed it, with a new head it should be fine

$2 shop sells engagement rings.
Seriously though if you have another car you might be better sorting priorities which might mean the Mu has to wait. It will wait patiently and loyally for your return where the fiance might not.
Min 2k to fix if its as bad as you say