Thanks for all of the replies. This was a very hard decision, but for the price these are going for in my area and the condition that mine was in, I decided that it's best to let this one go. The front suspension was in need of quite a bit of work. The AC was not working, interior is pretty tired, windshield is broken, tires are getting thin, and brakes are probably due soon.
All together, if I were to fix everything and get the engine sealed back up (front and rear crank seals, oil pan) I would probably be looking at spending $6-$8k to make my truck worth maybe $11k. If I find that the issue it is having is repairable, I can pay for the repair and sell it for around $4500. If it is not repairable, I can keep the junker around my house for 6 months while I wait for someone to give me $600 for it, or I could take it to the scrap yard. I'll know more when they tell me what is wrong with it.
In the meantime, I bought a 2006 5.9 Cummins in exceptional condition yesterday. It has brand new tires, AC blows cold, interior is in excellent condition, body is excellent with no dents and great paint, all glass is good, 103,700 miles on the clock. Now I just hope that this one lasts as long as my Ford did and hopefully it tows at least as well as the 7.3.