1999 Forester Overheated Now Won't Start

My wife was driving her 1999 Forester when it overheated on the highway. We have noticed lately that the heat only worked when on the road but not at idle. Was going to check/replace thermostat and flush system and then this happened before I got the chance (hoping it wasn't the notorious head gasket problem). Car got towed home when I first tried to start it sounded like the engine was seized, but after a long recharge of the battery i got it to turn but it will not fire. Engine also doesn't sound "right" (not sure how else to describe this) when attempting to start but it could just be the fact that it is not catching and I'm hearing the starter/engine rotating (and I am fearing the worst).

Question is, is the engine completely blown? Is there some other reason why it won't fire (ie. do I need to disconnect batt to reset computer maybe?). Bought car last year for $1700 and have put another $1200 in for exhaust/wheel bearing and a few other minor fixes. Has 200K miles so I'm wondering if it's anything involving new heads/motor if we should cut our losses and buy something else.