Parts $carcity? Even basic stuff like rings, filters, gaskets must be difficult to source. BUT it has been done. There might be a network for sourcing the basic stuff for a rebuild.
As to costs, all heavier than air vehicles require heavier amounts of money.
So, we can get down to the hard facts. Firstly, there is a big difference between a flight standard engine/build and the various levels of static or running ground engines. The flight standard we can define as built to the Rolls-Royce specifications, and here you are in the realms of hundreds of thousand £/$. However, for a ground running rebuild, the cost of parts is much lower. Nonetheless, Merlins do not grow on trees these days and like most historic things, they do have worth.
To start with, you will need a suitable garage/workshop. It needs to be at least double car size with power, lighting and some workbenches. A lathe and pillar drill are helpfull, but if you have to outsource welding / machining work you need to factor that.
You need at least a static engine stand, preferably a rotating stand, an overhead hoist and lifting gear. Later, the engine will need a display stand and a trailer in fact, a testing/running trailer for ground running. At the very start, you will need to have or hire the means to move your 1500lb weight engine to your workshop, without damaging it.
Comprehensive quality tools and equipment are required. Special tools and adapters are required for some jobs, often you need to fabricate adapters to properly lift or hold units or engine assemblies during strip or rebuild.
Now, the amount of work that an engine needs for ground running standard varies from the almost impossible to no work required! Most of us will have experienced buying a used car or vehicle, they vary from clapped-out trash to almost new condition. Used aero engines are the same. This is a really difficult part of the project. Unless you are able to see an engine running or buy it with genuine guarantees, it is very tricky. Chances are, your used Merlin for £10,000 is going to be a crusty non-running mess, if you are lucky it will be in a stand!
Here, I am afraid, you are on your own. If you watch Peter Grieve's rebuild of his crashed MerlinXX, you will see that it has amazingly little damage or corrossion. This is quite amazing.
Generally, used and long unmaintained engines have many problems, waiting for you to discover! Part of the problem is that these engines are very difficult to dismantle if they will not turn. There are ways and means for most problems but, as you can expect, the time and costs to sort problems can be prohibitive!
That is just a few of my thoughts. The whole thing is a bit like a very big vintage car rebuild, a bit like a large R-R or a Packard V-12!
What do you think?
Eng