oh no...can't believe I only just saw this thread... certainly one of my favorite 323 sedan's of all time...irrespective of model, year etc.
If its any consolation, its probably a good thing they totalled it (even if it doesn't seem like it) - front impact damage repairs are rarely without their problems. I recently had a front quarter panel (low speed) impact, which was repaired under insurance by the best in the business at chassis alignment over here, and it still isn't quite right (even though they have shown me data from their machine to say its back within manufacturers tolerances)....and I do sometimes wish they just spared me the let down every time I hit a corner in anger, and just wrote the thing off. May be a hard thing to swallow right now - but to get it repaired only to have it be half the car it was would be just as bad imho....
Having said that its a terrible thing to lose something you've poured your heart and soul into. and to see it like that must be truly heart breaking.
Buy the wreck - its still worth something - more than the wrecked value at least....that gives you options - part out and make a quick buck on it, or keep it until the time comes where you can afford to swap out the good bits into another car. With the benefit of experience, you'll be able to build an even better one.
I honestly can't believe that a destroyed fuse box was the killer though - surely one could be sourced from a rear-end wreck at the local salvage yard for cheap.... its hardly a complicated thing to replace. Insurance companies can be such a pita when it comes to these things and often their decisions can seem totally arbitrary and illogical.
Anyway.... hope you get back on the road soon - and hope you do decide to eventually rebuild you msp....this place just wont be the same without it
edit: oh, and as for the thousands it would cost for a workshop to swap your powertrain over - i'm sure there are enough back yard mechanics on this site, near you, who would love nothing more than to pull a massive 48hr beer and pizza fueled change over for you.... think outside the box...it needn't cost you a fortune to bring your dad's protege up to scratch...if you buy the wreck, and enlist the help of the community, you've got all the raw materials you'll ever need....hell if i wasn't a few thousand dollars worth of plane flight away i'd defiantly put my hand up to help....