300 bucks? Go get it right now.
The 96 engine had different porting than the 97 engine. The mounts were very slightly different. You may have to put the mounts from the 96 on the 97 motor. I had to put the 97 mounts on my 96 motor to put in my 97 sled.
The 96/97 ZRT is known for water pump troubles. Fix that asap. Check the gasket cover to and get rid of those stupid Phillips heads. Go with socket heads with washers combined with goop and a new gasket.
What to look for on the new engine - Compression. Also look inside the ports at the pistons and check the condition and make sure the skirts aren't cracked. If you see blue, stay away. A "little" scoring is OK and expected but nothing drastic.
If I were you, I would pick up the 97 motor and part out your 96 motor on forums and/or ebay. You have alot of money sitting there. Every part is worth something to somebody.
OR, you could get the 97 motor, get it in your sled, and fix the 96 motor if its possible. Maybe you just need a top end rebuild kit and a new jug.. thats all about 300 bucks right there. I haven't looked at complete motors lately but a ready to go motor (ZRT6) was bringing over 500 bucks. Or keep it as a spare.