$5,100 to Repair 1997 Mustang? Help!! I don't want to lose my Car!?

In a nutshell, sounds like you overheated the engine, blew the head gasket, have major internal engine damage (hence the diesel sound). You need a new engine. If you ask me the car is not worth dumping 5K into. I would cut my loses, sell as is and advertise the good points of the car, Then put now the bad, needs engine (running) but need to be trailered. Then figure out a price that seems fair for what you have. Your not going to get the money you already put into it. So keep that in mind. Book on it is 2100-5100. With a bad motor youll just have to figure out the number.