Have a 94 GMC 3500 (108K) with the 6.5 and like it a great deal. From my reading and mechanics advice it comes down to service. Most people don't perform the service this engine requires and they have problems with it. For example the injector pumps (or the controller chip) typically fail about 130K if your not diligent about changing the fuel filter at least every six months (every three months if using bio diesel). Oil changes every 3K, glow plugs on a regular basis (poorly functioning glow plugs are often the reason for starter failure). Also, a set of Optima marine batteries and new heavy duty cables work wonders for starting. An engine block heater is a must also.
A mechanic friend had a tow truck with the 6.5 in it, went 750K miles. They had a propane injection system and changed the fuel filter every 3 months. They had a total of 3 injector pumps (over 250K for each pump) 4 clutches, a few sets of glow plugs and almost nothing else but regular oil changes.
If your on a very limited budget stear clear, the service for this engine must be done or it will have problems, if you can afford the service and an injector pump every 250k the engine should be just fine. The turbo versions have enough power. Also, you should learn to drive them differently, there is no reason for this engine to ever go more than 3000 RPM and you should deadshift it (let off on the accelerator, shift, then apply power again). Power specs for the turbo versions (2000) got to 220 HP and 440 TQ, there is a performance chip for these engines by BP. I second the advice given earlier about a cooler for the PMD.
Check out the last few issues of Diesel Power (Feb 07, I think) they are featuring this very engine as a good swap canidate and they address some of the concerns brought up in this thread. One thing they did mention is that it is often the chip on the injector pump that fails and many mistake this for a pump failure instead.
From the thread I think you're right to pass on it at this point as care on this engine is expensive and it sounds as if your just starting out.
However, think about the total costs, at $6K truck cost (for me), plus about $2.5K in new tires, batteries, and clutch and an expected $1.5K injector pump and $1000 in oil and filters I should be able to get 5 years use and expect it to still be worth $4K ($11K costs less residual value of $4K = $9K). For a 2001 Dually Duramax the best price I can expect is about $15K, over five years I'd expect $2.5K in maint. and I'd loose about $8K in value ($25.5K costs less residual value of $7K = $18.5K costs).
Spend $18.5K or $9K over 5 years for my truck, Hmmmm pretty easy decision for me, I'll take the 6.5 becuase they work well with proper service and my total cost of ownership will be less precisely because so many people don't understand the engine and as a result I can get a good truck for a fraction of the cost of a newer diesel.
My second choice - a 1999 Dodge 3500 standard trans. with the cummings engine - about $13-$15K to purchase but the cummings will easily go 400K with good service. Avoid the auto trans. (or plan on replacing them), none of them are heavy duty enough to stand up to lawncare/snow removal over time, though I do prefer them for ease of driving.
