Block is toast for sure. Heads should be fine and the crank should be ok too. A new block with pistons and rods is all you should need.Yeah, i bet this engine is toast, with the low compression + knock, i dont see it smart to rebuild with the machining needed.
With a new block, i will also replace the injectors since it is likely thats the culprit, coolant level is and always have been stable.
Hopefully the heads can be reused
Idk how much you’re willing to spend but in that situation I’d look for a used low mileage engine. Probably going to be cheaper than a brand new block with new pistons and rods. Talk to the people selling them and see if they’d be ok with you dropping the pan and borescoping the cylinders. Make sure they aren’t full of sludge and the cylinder walls look ok.
If it’s not a daily and you’re willing to spend some money then perfect time to drop a 6.0 in there.