When I decided that a Suburban was the route I wanted to go for a tow rig, I got excited when I found out they came factory with a 6.5 turbodiesel! Then I researched them. Then I test drove one. I won't pile on the 6.5 hate because there is a ton on the internet already and I don't have much experience with them anyway. I will also say that I don't think the one I test drove was running correctly.
From what I gathered, the 6.5s needed a decent amount of upgrades (cooling, PMD relocation, etc) to be reliable, didn't take abuse well so how the previous owner treated it could play a huge roll, and were going for about $1k more than a similarly equipped gas truck. Those things and the fact that gas is about 20% cheaper than diesel (which comes close in my mind to offsetting the mileage advantage diesels have) I ended up with a clean 96 Burb with the 7.4L gasser with 166k for $2900. It needed a little work, but nothing major. Power wise, it is very respectable. I got about 9.5 mpg towing on the first trip pulling 7k or so and loaded with tools and camping gear. The only thing that makes me wish I had a 6.5 is the ability to run it on biodiesel or veggie oil (although the latter seems to be questionable on the 94+ models anyway).
Long story short, I'm happy with the tried and true big block. It's reliable and parts are cheap, and there are deals on them all over. The only Cummins I could find even close to $2900 were usually sitting in field somewhere. That being said, my long term plans for it include a 12 valve Cummins.
but they will get you where you need to go.
