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I did mine myself and it wasn't as hard a job as it looked like it would be.

But I'm an airline mechanic by training and an airline maintenance instructor by profession, so I don't hesitate to jump into any job (even my co-workers thought I was nuts to rebuild my own TorqueFlite several years ago, but they're cowards ;-) )

If you have good mechanic skills, it can be done in your garage. But if I'd thought I could have had it done by someone else for $600, I wouldn't have thought twice about taking it to the shop.

Your call. But replacing the water pump (and, IIRC, the belt tensioner) is smart because if they fail next month, you'd basically have to do the whole job again.
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