oohh 1.8d ...snapped belt springs to mind...pull the timing belt cover off and have a look...the tensioner/idlers are prone to failure on these and then in third gear as you say you were i would be saying belt valves and prob snapped camshaft and caps...new 2nd hand engine matey is the cheapest option or a 2nd hand head. sorry to be the bearer of bad news
although might be something completly innocent!!