Well, here's a quick update on these two project cars just for fun.
Despite my hopes to the opposite, the green 265 wagon does have a blown head gasket. I am guessing the PO drove it around for a while with a leaky water pump. I found out the HG was blown when one day I went out to start it just to move the car, and it wouldn't turn over... hydrolocked.
I started taking glow plugs out one by one to find which cylinder was full of fluid.... Of course it was the #6, which was the last plug I went after, and the hardest one to get to. Murphy's Law again.
With the #6 glow plug removed it was able to start and run on the front 5 cylinders, spitting antifreeze and diesel out of the glow plug hole and out of the exhaust pipe. Not a good situation, but enough for the car to move under its own power for a short distance. I don't think this early small-headbolt D24 engine will be worth fixing so not too concerned about collateral damage here fortunately.
For entertainment value I made this video of the wagon firing up to move indoors one day over the winter.
https://photos.app.goo.gl/Ezhmu6WSZWLcYiDw8
Still hoping the engine from the silver sedan will make its way into this wagon sometime this year. May end up being a project for next winter.