To my dismay my car started leaking coolant this week, upon filling up I notice the reservoir is cracked and what leaks out looks like chocolate milk. See video https://streamable.com/cds44

Local independent repair shop is advising to swap with a new motor completely as a head gasket labor is more expensive. I am now in the market for a well sorted N54. (which are very hard to source). Are there any differences between the N54 for the wagon and the other models?

I have a FMIC, downpipes, stage 3 clutch, and silicone inlets sitting in my hatch, was even thinking of adding a tighter shifter since the stock engine and transmission have to come out. One part of me wants to slip these on with the swap and another part wants to get it sorted in stock form first. Any advice is appreciated.

Also best places for N54 engines? My car is a 2008 535xi wagon, manual 6 speed.

 

Have you checked your oil filter gasket/oil cooler gasket yet? I believe a leak there could allow coolant and oil to mix. Could check that before committing to a new engine.

 

Yeah, it's rare for a head gasket to go out, but this is very common.
This is why I do my own labor and research. Avoid getting taken advantage of or wasting money on unnecessary 'repairs'.

 

All N54 engines should be the same. Differences are in the oil pans (rwd vs xi), 6 vs 8 bolt cranks, some non-sport package/XI cars have a non-oil cooler OFG) and the 335 turbos are different than the 135/535.

Agree with the 1 above. Check your OFH/cooler to double check. This has happened to a few old Volvo buddies and its much better to figure the cheap solution first