I have an E2D on my RV-4. My recommendations woulld be to overhaul it.
I would do it myself if I was you. Sam Buchanan's web site has a great article on how he did his and it inspired me to do so as well.
On an engine of that vintage the CAM is probably worn or has corrosion on it as that is an area of Lycomings that is not well lubricated.
The overhaul process is basically:
Take the engine apart.
Send major components (Case, Crank, CAM, etc) to places that will bring them back to spec by grinding, etc.
Buy new pistons and consider new cylinders depending on their state.
Put it back together.
It really doesn't take that long and you will learn a lot about what one could argue is the most vital part of your machine that is prone to wearing out.
I added new pistons that raised the compression ratio making my E2D something else that puts out 160hp probably.
The lycoming engines are simple beasts and if you take this approach your will end up with an engine that will outlast your ownership of the plane.
Budget $10-15K for parts, etc. You might do it for far less.
Buy the overhaul manual and parts list and follow the directions...
Of course asking around for help will lead you to lots of people more knowledgeable than me and they might save you more in the process.