Overheating

Adding cold liquid to an overheated empty engine is a really good way to crack the block or heads and ruin the engine. It sounds like the engine you have is cooked.
Price wise depends on what the rest of the cars condition is and what you intend to use it for. An 1989 wagon was usually equipped with the Oldsmobile 307 as the base engine. Not a bad engine but not a real easy one to upgrade. If it was mine and in really good shape body wise I would probably get a re-manufactured engine. That gets you a zero mile engine with a warranty. You could hunt for a used engine but most will have a lot of miles and need to be rebuilt which puts you in about the same range as the re-manufactured.
Is the body very good? How about all the rest?