My question is why you would want to spend the money on a new bottom end when you have what appears to be a blown head gasket?
Also, is 2nd gear gone, like broke, blowed up gone, or not shifting into 2nd, like a solenoid is gone blowed up? You say it's slipping. That sounds like a solenoid to me. I blew up my tranny in my '01. UGLY sounds. I had to flat bed the car to the transmission shop.
You have a set of gears, and a set of clutches. The clutches are the same for all the gears. If the car goes in 2nd without ugly noises, you didn't blow it up. You'll still have to pull it to fix it, but I don't believe it's toast. With the turbo setup, you'll need a beefier tranny anyway.

 

i agree with roken about the tranny issues if you are worried about the bottom end hell you actually can rebiuld the whole thing whilt the tranny is out. what i mean is you can get thebottom end a little easyer. to check the bottom end as in what the every thing looks like. but its a opinion i would get better head gaskets its a raity that the piston rings go if it was only head gasket whit smoke. check your heads when you take them off

 

i forgotten to mention get a head gasket that is a little thicker because how easy it was for the old ones started to leak. do to the boost that you have it wont hurt to have a step up from the original one. the supercharged cavilier i did the same do to a insane amount of boost put a hard strain on the gaskets i was lucky i didnt strip the head bolts in the block with the boost. got to love a iron bottom motore i hate the iron bottom and aluminum head setup

 

The trans isnt exactly blown up but it does slip and grind and just sounds terrible. Itll defiantly hold till the spring when i completely rebuild the one i have.

Ive taken Bumpins advice and i am gonna drop an l32 in and put new heads and cam and all in with it while the trans is gonna be out anyway.

Im just gonna fix it for now untill i save the money to rebuild everything. Cant wait lol

 

get your self a l26 uim... get rid of the plastic... i'm sure u read the thread in off topic...

 

How would thicker head gaskets help? Cometic offers different thickness MLS gaskets for the 3800- but I've never heard anyone say the thicker ones are less susceptible to blowing out.

lol- how much boost were you running. I can't see you stripping head studs from too much boost on a street engine.