That's the dilemma I had with two of mine, the '02 4.2 TB and the '06 5.3 Saab. The TB blew the trans at 330k km but the body was too far gone so not worth it to fix and the motor had been a trouble child having been poorly maintained during its life in the previous truck it came from. The Saab, although I liked this truck a lot, was a bag of trouble since I got it and it got a rod knock after having, what I thought, was piston slap the whole time I had it. It never had any glitter in the oil before that. The body was also too far gone with rust and the trans was also original with 220k km. Both were just not worth the time, money or effort to rescue.
You'll have to evaluate for yourself what this truck is worth to you and if it's worth it to throw another $2000-3000 at it. The next big thing that might go is the trans so keep that in mind. The body is the biggest factor in my eyes. Being in the rust belt, that is the biggest factor. If the body has rust through or the frame is getting eaten away, that would be a killer right there for me.