Loud clanking, loss of power, stall at idle

[tspies]

I just got an 89 240 with 170k miles, everything stock, and planned to drive it around for a while to see how it ran, do some basic maintenance to get familiar with her, then rebuild and maybe turbo it this summer. I've taken it on two four hour trips, mostly cruising, and driven it around at school a bit. On the last half hour of a third four hour trip, it started clanking- like a loud metallic clanking, and there was less power available in all gears at all revs. If I shifted into neutral to coast the oil light came on and as I coasted into my driveway in neutral the car stalled and wouldn't start back up. I checked under the hood and there was some hissing, and when I opened the coolant reservoir steam came out. It was low on coolant, but not dry. I started it this morning and it took a while- and lots of pumping on the gas, and with it clanking the whole time. It ran for about a minute and stopped. I haven't started it again because I'm afraid it's low oil pressure, but I haven't gotten a tester yet to check it. Should I bother putting a turbo on an engine with this mileage anyways, or use this as an excuse to swap in a newer motor?