1972 TS185 Crank Seal - Rebuild Engine?

[hammershipdown]

I got this bike and took it to the shop. The guy is gonna give it a tune up, adjust the carb, but because of the oil in the exhaust, he thinks it might be the crank seal. I'm a beginner, first bike, know some about old chevy engines, but nothing about motorcyle engines, but like this little 2 stroke and want to fix it up.

The guy at the shop suggested it might be cheaper to find another engine, rather than rebuild this one, if in fact, it has to be taken completely apart. It runs, but keeps dying and idles funny, on top of the smoke and oily tail pipe. After reading some of these posts, I wanted to be very specific to make it easy.

1. Is there somewhere to find a good rebuilt or solid running TS185 engine for a 1972 other than ebay or craigslist?

2. Is it possible to fit other engines on this frame? I believe the TS125 was the same frame, but was curious if a larger or later model engines would fit easily? Would I be able to fit a small 4 stroke engine on this bike? any suggestions?

3. How much should I be spending if I have someone rebuild this engine for me? I was quoted at roughly 1200US, which I half expected, but the shop i took it to is well renouned here and it is probably a bit more expensive. The guy does amazing work and knows old bikes, but if I could get it rebuilt at half the cost, that would be even better. Without comprimising quality.

Thanks for your help!