I miss that car dearly. It was always so reliable to me. I often check craigslist for another S2 XJ. Not that I have the space but if the deal was right, maybe, maybe
I would first start with making the head removal tool as illustrated in Kirby’s book. As for parts, these are the things I can think of off the top of my head;
- Complete engine gasket set (including MLS head gasket)
- New piston rings, main bearings, rod bearings, water pump
- New timing chain guides, tensioner and chain
- New coolant hose kit, spark plugs, ignition wires, distributor cap, rotor
- Since yours is an EFI car, you can have the injectors cleaned and flow tested. New injector hoses
For tools, you will need a set of crow foot wrenches to remove some of the hard to access bolts, good torque wrench and something to hold down the piston liners when rotating the engine.
I’m sure there are many other things you will need but this is a good start.