All the work you describe needing done is pretty simple if you can tackle it yourself. The 'hardest' part is probably welding, though it is perfectly doable if you practise a bit. J&R driveshafts are very keenly priced and good quality by the way, when it comes to the driveshaft. As martin says, you should not need to remove the engine unless the welding required is right on the side of the front chassis rails or somewhere else that is inaccessible with the engine in. If it is the usual areas under the ECU or in a similar location on the other side, then engine can stay in. Some pics of the rust would help.
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