So it's an '87 or '88? Looking at the pic more closely I see now that it has the exposed front door hinges. You might still want to consider swapping that LT230 out for a newer, stronger unit like one from a DII if you're going to be running a diesel.
A buddy of mine just picked up a DI with an Isuzu diesel in it. He likes it well enough but found out in the process that he's just not a Disco guy, so he picked up a '94 LWB that's going to get a diesel swap. Probably not the Isuzu though, he wants a Mercedes 5-cylinder.
That truck looks pretty clean (except for the big dent in the hood!) How long has it been sitting?