I'd love some good advice...

[ButtJuice]

So basically my 86' 325 needs some serious maintenance. I opened the coolant, and saw that it has a bunch of oil mixed in with it.

What is it that I need repaired? head gasket?

I basically have a grand to spare for repairs. I'm going to start with the timing belt, what are your suggestions?

[HarryPotter]

While you are in there, might as well do a compression test, head gasket, possibly damaged head. Rings might be shot, I'm not a mechanic. But I have to know what color underwear are you wearing?

[ButtJuice]

gray briefs.

[Mike325]

This sounds like a blown head gasket. I would go with a motor swap to an I engine. You will be much happier with the higher revs and more HP. You should be able to do the swap for about 1k.

[mikeedler]

part it and buy a different one-- unless the body/paint are really nice.
and thats the best advice possible if you can't fix it yourself.

[nando]

seeing how it's an eta, if the rest of the car is mint, I'd consider an M50 swap as an alternative to rebuilding the eta motor. Otherwise, I'd part it out.