Stripped helicoil in block

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Have a 06 with a 2.5l
Bought for my gf to learn stick on.
Thought it had a blown head gasket on the left side on bottom. I pulled the engine out to go ahead and replace the clutch while I was at it. Upon pulling the head I discovered that the bottom-middle head stud was completely loose in the head.
Upon further investigation I discovered that P/O had inserted oversized helicoils into the block (12.5mm, oem is 11mm I think) and the helicoils has failed and that this loose stud was what was causing the leak.
The stud will still screw in so the insert hasn't failed completely.

What do I do now? Should I just say f it and put it all back together and cut my losses?
We're not out of pocket yet bc we received 7.5k from insurance after someone totalled her last car. (Her First car, parents payed for it)
We payed 4500 total for the car
So I still have 2.5k to play with before we are out of pocket.
I see short blocks for the turbo models going for 12-1300 online.
Could also get a used engine from junk yard for 600 but that would bring the risk of this happening again
Any advice? I can attach pics later
 
The best is this type of repair. Hire a professional to complete this task.
 

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The best is this type of repair. Hire a professional to complete this task.
Haha, see, the thing is. I have the timeserts. I can't use them because the hole has already been over sized.
 

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