I certainly would not put the money needed to rebuild an engine into your 4 cylinder, sorry but I can't hold my feelings back!
Now let me state that I own a 82 CJ8 with a 149k miles Iron Duke and it will kick the butt of my 86 CJ7 with only 50k miles. The 86 has a T5 OD tranny, like get serious. It is not that I'm opposed to the 4 bangers, I just wouldn't put 2-3 grand into one and that is what you are about to do. I rebuilt my 258, It was $1200 machine work, $425 new head, $150 new intake, $400 new carb, $150 new header and NO labor to assemble or install. I guarrenty you will be north of $2000 before it runs again. Find a complete running used 258 or go big and get a 4.0 and never look back. You'll be gald you did.
1985 CJ7 - total customization underway, Sublime green and Plum crazy purple, Ford 9", 258 w/ Holley 475
1985,93 CJ7,YJ - L98 TPI Vette motor, Atlas twin stick, Dana 60s front and rear, Arbs, 39.5 Swampers