Welcome to the forum, Wolverine. If you happen to see Jean Grey wandering around, tell her I'd love to see her in the next movie... And in my apartment after.
As far as the CRD goes, you have been handed the stark reality. This is good, but I believe you DO have the experience and skills if you are making mods like that to an XJ.
Check out lots of threads on here, and understand this: This is the BEST and largest collection of brains and knowledge about the KJ CRD, anywhere.
Want to know about doing your own belt? Try a thread like this:
http://www.lostjeeps.com/forum/phpBB3/viewtopic.php?f=5&t=61253Doing the belt is important, and depending on your level of bravery (stupidity, in my case) if the other parts are inspected thoroughly, you might decide to change only the belt. This is possibly a bad idea because of the reasons the others here mentioned... BUT the engine has a built-in safety if that catastrophic fail happens - The valves will NOT bend, the rocker arms will break. This is the designed-in failure point, and recovery from that costs $1200 in parts. Not a happy price, but far less than the $8000 a new engine will get you for.
Replacement turbos (BETTER than stock) are available from Green Diesel Engineering, who is an active member of this forum. They also have GREAT engine tunes and transmission tunes that make the CRD MUCH more reliable the way it should have been originally. Killing the EGR is easy with a GDE tune, a little harder with an SEGR device... But both will add YEARS of reliability to the CRD lifespan. And contrary to popular opinion, a local mechanic will NOT care what you have done with the EGR... He just won't do it FOR you. If you want to get your hands dirty... There isn't anything that you can't do with a CRD, and you will have a huge grin and amount of satisfaction of doing it yourself and CORRECTLY.
I have over 112000 miles on mine currently, and I would be happy to discuss the long list of mods listed just below this line. All are a good idea, and none are terribly difficult to do, if you follow the directions.