Find a local engineering firm who will skim the head, pressure test it and fit new stem seals first.
Then get the head off and take it to them.
Get the block clean and look it over, then get the head back on with a new cambelt and head gasket.
All that shouldn't cost a lot more than £50.
If it's still using oil you have a knackered bottom end that you didn't spot.
Unfortunately there is no guarantee that a 2.0 bottom end from a scrapyard will be any better than what you have!
As previously, tell your insurance company if you rebuild with 2.0 as they have 2.0 CAST into the block - not something you can chisel off or change to 1.8!
They are only likely come after you with a thorough inspection if you hurt someone else/someone else's stuff - your car might be worth nothing but the damage you can do to other property or people could cost them seven figures.