Have read through this thread with some interest. My wife has a 3 door 50th Anniversary model (98) with the 1.8 litre petrol engine. Cost us £22k with no ABS or HDC. Beautiful looking machine though.
A couple of things to consider.
The three-door is actually slightly lighter than the 5 door, and corners pretty well.
The ground clearance on the freelander is significantly lower than any other landy (and most other offroaders). Not fussed about centre of gravity here, it just makes it a sight easier to dig out of sand/snow. Chatting to the guys from trailmasters a few years ago, they reconed the freelander was brilliant in sand but that the clutch wasn't up to the job
On the issue of the engine, if you pick one up for under £5k you are guaranteed to have a problem - it's not a question of IF but WHEN. It may have already gone, but if not then don't believe the hype, Landrover will NOT bail you out. When ours went, they paid for the part - about £10. We had to pay for the fitting & no amount of screaming made any difference. The support of the dealer helps, but Morissons of Stirling were unsympathetic.
Saying that, if you can pick one up for around £3k, take it to JE Engineering, they can fit a strengthened cylinder head with a different gasket design for similar money to the actual cost of head gasket repair but add the assurance that it will not happen again. Add to that a stainless steel exhaust & ITG induction filter & you get 0-60 in around 8-9 secs. & you will still have spent under your target 5k
Aircon - on the earlier models, the cooled air is drawn through a pipe that sits right next to the engine & gets heated - a bit counterprocuctive to say the least!
Ours returns about 22mpg. 4WD is NOT permanent, but is determined by the viscose coupling - the fluid has been known to leak but you only find this out when you get stuck. Stay away from the bodykit fitted models or inspect any you might look at closely. Ours was peeling away because the kit is straight but the body is curved. This was fixed by painting & laquering the kit on the door after fitting rather than before.
We've had ours from new, and are disappointed at the current residual considering a year ago it was worth nearly 11K (I believe it books at about £4k without taking into account the extras), but the announcement of a completely new model has dropped the bottom out of the market. Wife wants a new car, & I'm torn at the thought of letting this thing go after all the money, effort & time we have ploughed into it. I don't like driving it but it looks great on the drive & is fine on snow, ice & greenlanes.
For reference, I drive a TD5 Discovery Commercial. I would recommend taking a look at the 300Tdi Disco, but make sure it's an R or S plate as the earlier ones had timing problems. So long as you're happy with the finish on the vehicle & don't try towing over it's capacity it will probably never let you down (just leak on you) Alternatively, I'm assured the earlier 200Tdi is an excellent engine, though I appreciate it looks it's age. I seriously hope my current TD5 never gives out on me, because I love it to bits. 32k miles so far & the only problem is the fuel gauge is reading different to the fuel warning light, but the dealer keeps refusing to fix this on the grounds that it is 'erring on the side of caution'. In other words, 'lots of them are like that & it's a pain to fix so we'd rather not'
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Funnily enough, I was discussing this with an agricultural and plant fitter last Friday. He reckons 200 and 300 Tdis cope really well with cam belt failure - he's never had to replace a head or pistons, just valves. He's not heard of Tdis becoming tempramental after a post cambelt failiure top end rebuild. 
