1987 Nissan PU - new engine needed?

I have a 1987 Nissan PU, 2wd, 141,605 miles and a Z24 engine. I was driving and the engine just stopped, no noise. No slow down. I towed it to a repair shop and their suggestion is its a head gasket or a cracked block, but to know for sure it will cost $400 to start taking it apart. The truck will turn over but only when there is no water in the radiator, the mechanic says that when they put water in, the engine "vapor locks" and stops.

I can do basic repairs and am capable of taking things apart, but how do I tell what the problem is?

I have driven the truclk for 18+ years and have never had a major problem, normal stuff only, and I change the oil every 3 or 4 months. I only put on about 6,000 miles a year. Thanks for your help, Jeffrey.