In your case, having a blown head gasket and a knock could mean the engine overheated and caused other damage. I would want to know why the engine is knocking before I replaced the head gasket. It is possible you could get it back together and have to tear it down again to fix the knock or the knock is catastrophic so replacing head gasket was a waste of time and money. Do you know what caused the blown head gasket?

Tackling a DIY project is all about having the right tools, organization, doing the research beforehand and having a plan B if things don't go as planned. A critical deadline is a good way to make a project into a disaster.

As mentioned, you don't have all the right tools without good ft/lb and in/lb torque wrenches. That's how you keep from stripping threads or breaking off bolts. In addition, the head has to be torqued in a specific sequence and stages. My guess is you will be needing other tools that you don't have to be able to get it torn down easily. Sometimes without a specific socket or wrench you can't reach something (critical deadline impacted if you have one).

Engine timing is critical. There have been many posts where a member didn't purchase good quality special tools to time or keep the engine in time and ended up having to tear it down again to make the correction. If you aren't willing to purchase very good quality special tools needed for a project don't DIY.

On a complexity/tools needed scale of 1-10, a complete brake job is a 2-3 to me. Replacing a head gasket is a 6-7. I always believe if I can tear it apart I can put it back together, it works. If you intend to keep your X5 for awhile it is a good idea to start tackling more complex projects and expand your toolbox as you go.

Part of the consideration of replacing an engine is what you know about the one you have. It is almost always less risk to stay with what you know verses what you don't know if the difference in cost is not outrageous.

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X5 4.6 2002 Black Sap, Black interior. 2013 X5M Melbourne Red, Bamboo interior
Dallas