First off, what evidence did he give that "both" heads are bad? For that matter, what evidence is there that even one of the head gaskets is blown? And let's remember that the Northstar has a "limp home" mode, so just running out of water once probably isn't enough to wreck the engine.
This car needs a second opinion. Just because it's losing coolant doesn't mean it has a cylinder head problem. My sister was told that her Cadillac had a blown head gasket; it turns out it was just a leaky hose. So the first order of business is to take it to a competent mechanic (other than the dealer) who can hopefully determine if it has a blown head gasket.
Assuming the worst, that the head gasket is blown, then the next thing is to decide what to do with it. Your options are:
1. Try to seal the leak with one of the cooling system sealant products. The cost is cheap and you have little to lose. Google "northstar head gasket" and you find plenty of snake oil to choose from.
2. Do an in-vehicle head gasket replacement. I understand that this is something most shops won't attempt on the Northstar. Difficult to do with low probability of success.
3. Take it to a shop that specializes in Northstar head gasket repairs. It turns out that some folks have come up with head gasket replacement process that involves replacing the bolts with larger studs. Not cheap; the site below says it runs $2200. They have a list of shops that are licensed to do their fix. I have no experience with this particular repair or company, so I will not make any recommendation on their particular repair.
4. Replace the engine with one from a junkyard. Why would the junker engine be any better than yours?
5. Replace the engine with a new or rebuilt one (e.g Jasper). Is the car worth it.
6. Scrap the car.
If it was my car, and in good condition like you say, I'd opt for #3.
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Today's Featured Article - Seeing an Old Friend - by Joe Evans. Dad had a concrete contracting business starting in 1960. One of his first pieces of equipment was a Ferguson TO-35 with a Davis loader. Dad replaced the TO-35 with a MF 202 Workbull, essentially an industrialized Ferguson 35 I am told. Dad bought the 202 new in 1962, and I recall quite clearly going to the dealer with him to sign for it.
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