Your mechanic needs to be smacked.
First off, if it's truly the HG, but it's as minor as you say (no contamination of oil / coolant), then the block wouldn't be warped. Warpage happens in SEVERE overheating conditions, and by then, the HG would be completely gone. If the block was warped, and the HG was bad, you'd have all the classic signs of a blown HG.
A few thoughts - he should have done a compression test / leakdown test to confirm bad HG before sending you off to buy a new vehicle... Grrr.
And what the heck does he mean by "no promises?" Sounds like an amateur. Walk away.
He just doesn't want to do it, because it can be a pain (or he doesn't know what he's doing). However, we can walk you through it (we even have the factory service manual for you), or you could find another mechanic (I prefer independent mechanics, or people who do "side" jobs).
Alternatively, you can get a known good takeout engine for around a grand - I like these guys:
http://www.soshinusa.com/
Sure, your truck might not be worth a lot, but how much would it cost to replace it with a new one? Tell your mechanic HE can make the payments on a new ride - I'd fix the truck. My 2000 Frontier had 300k on it and when I sold it, it was still running great.
If your mechanic wasn't lazy, he'd find the source of the leak (it's easy). What if it's a bad freeze plug? Is that worth scrapping a vehicle for? 176k miles is just getting broken in good.
Did I mention he should be smacked?