Well you can pull the head in place without removing the engine. When I rebuilt Rhapsody's 2GM, the problem was scale built up in the water passages. The front cylinder was completely blocked in the head passages. I used a hammer and chisel to remove scale, Dremel tool to grind it out smooth, and then acid flushed with Vinegar. Again, if you have mechanical skills, you can save a lot of money to do the work. $600-700 to pull a head gasket could be reduced to > $100 for a gasket set if you did it yourself. The comment about "not enough material to rebuild on" is what worries me. I'd ask what components they are talking about, and why they drew that conclusion. I replaced the iron water bypath tube that was at the front of the 2GM because the nipple that held the hose to the water pump was deteriorated too badly when I rebuilt the engine - $36 for a new one.
Take it in perspective - what is the value of the boat, and what needs to be done to maintain/increase its value? You can spend money, or put in sweat equity. If you feel the cost/personal time is overwhelming for what you get, then make the decision to find another boat. Email me (link in header) if you want to be put in touch with other J/30s for sale. I know of 4 in the Southern New England area.
Bill