My 2004 GC developed a heavy engine knock - drove straight to dealer. Diagnostics: P0300 Evap Leak, P0302 Misfire #2, P0307 Misfire #7 - recommending re-machine heads or install re-manufactured head.
Only 52K miles, never smoked or had oil pressure problem. Even though it felt like it would stall at any moment, it maintained normal RPM.
Friend referred an engine replacement specialists (Motorworks) who can get me complete remanufactured N engine. Is it worthwhile to spend $5K? or should I consider selling for parts?
This is my 2nd jeep, loved my 90 Cherokee 5 spd went 14 yrs 150K miles before trading in w/o any major problems

 

You should definitely get rid of it. I'll give you 500 bucks for it.

Seriously - Post up in the Grand Cherokee Tech section. You may have more success there.
I don't know how they can determine that it needs head work by a couple misfire codes (unless they did more diagnostics or it is a common problem).
I't start by trying to resolve the misfires and evap issue (even if you put a new long block in it, those problems will still have to be addressed), and then go from there. Compression test #'s would be nice to have as well...

 

Dealer was afraid to doing compression test as it would cause more damage

 

Huh? Did a couple valves fall in the cylinders or something? I am missing some vital piece of information here...