I hydro'd my engine during a failed creek x-ing(truck died and tried to start it) when the truck was new, and it did a bunch of damage. Broke 3 rods, bent about half the valves, as well as other components. Nothing was beyond repair though, so you should have a re-buildable block and heads.

A 5vz would be nice, but as you know it is still a relatively expensive swap. I would do a power rebuild of the 3.0, i.e bore the cyls, port match the head w/intake/exhaust, and run some headers(if you don't already have them). This should give you a better performing 3.0, at about half the cost of a 5vz swap, and no wiring headache(unless you can find an ORS wiring harness).