Can she fix a head gasket? I don't know.
Well, considering that is a crucial part of the equation, I think you'd better ask her.
Then, plan on getting your own survey before you buy, and be sure to get a qualified mechanic to do an engine survey as well. That way you'll know what you're getting into.
The bottom line here is, once you have the engine fixed (either DIY or by hiring someone else), will it still be a price you can afford? If the answer is no, obviously you walk away.
The one thing you do NOT want to do is buy the boat now, and plan on getting the engine fixed sometime down the road "when you can afford it." What will happen is that the boat sits, doesn't get used much (if at all), yet continues to eat away at your cash reserves as you pay for insurance, dockage or mooring, other maintenance, etc. That's a formula for spending, in the long term, way more than you ever wanted to.