I bought one just like that this past year for $200. The engine was beyond reasonable repair, which was fine with me as I had the engine from my wrecked 1996 that I ended up swapping in. Now I am working on swapping my locking axles and the OME lift in.
Here's my take from someone shopping for a "rig". Not a daily driver but an off road rig.
I wouldn't buy an old Land Cruiser without the front/rear diff locks but with those diff locks even a non running truck..... Small Lift/tires/engine and you got yourself a built rig.. Cheap in my book.
If no rust and the rest seems like its been well maintained, I'd definitely think it would be worth it. You can likely find a pulled engine from someone doing a swap for $500-1000 and rebuild it on the stand or just throw it in there figure the rest out as it comes up. The other things like hoses, belts, fluids can nickel and dime ya but you can do that as time/money permits. If you can get the price down a little bit more, it'd be a good score!
If I am buying a LC to use as a driver of any sort, read RELIABLE, I figure in $2K for base lining. In your case figure another $2.5K for motor work and related parts. That puts you at $6.5K plus labor. What around you is available running for $4.5-6K?