Is it burning any oil at all? (ie grey-ish smoke out of the exhaust during idle or deceleration)
If it isn't, your valve stem seals and rings are still ok.
Change the oil and filter every 5,000kms, I usually do on my 336,000km KA sohc and the oil is always quite clean. Number 1 killer of engines is oil sludge.
Water pump / thermostat is a little fiddly to change, but if you take the alternator out first, gives you a bit more room. You can deal with oil leaks, but you don't want it leaking coolant or overheating.
I can do a rebuild of the distributor if you like, I put a new bearing and radial seal in the distributor housing, this is where the oil comes from inside the distributor. You'll know if it is this because there will be oil in the distributor cap and in the housing where the rotor button is. It's $100 in labour, plus the cost of the bearing and the seal (have to double check those prices, from memory the seal and bearing is about $30). It is dependant on the condition of the shaft in your distributor though, I did one not too long ago where I had to scrap the shaft because of wear between the seal and the shaft.
$5k would get you a half decent forged bottom end, problem is that is doing all the assembly work yourself and having a workshop do the machining for you.