very bad news -was cambelt/lifter noise

["Ed Shiers" <mcji6es2@fs1.me.umist.ac.uk>]

I spoke too soon.
Seen my mechanic this evening after he tried to fix my car. As I said 
earlier in my email I'd taken the car to him after having the head 
off investigating a knocking noise and assumed a tappet needed 
replacing. -(after starting the car in the yard I'd let it idle which 
revealed a knock from 1 tappet which didn't seem to go away).My 
mechanic had the cam cover off and sorted out the tappet and changed 
adjusted the timing chain. However ontorqueing up the bearing caps he 
couldn't get the necesary torque the he felt the ratchet slipping and 
didn't stopped short of the specified torque- this occured on say 4/5 
nuts. - basically this is due to me overtorquing them and to put it 
simply the head is now knackered - it would need to be sent of to an 
engineering firm to be sorted out at massive expense...talk about me 
being an amateur or what. That's not the all  though. he got it 
running and on idle that loud tapping noise disappeared but when he 
reved it the noise that i initially heard appeared again. My mechanic 
reckons this is major and definately not a tappet. He's going to take 
the sump off and have a look at the exact problem tommorow but says 
that he expects the block is gone aswell and beyond economic replair.
He also thinks that the oil I used could have played a big part 
saying that the warranty on a 400bhp ford turbo engine costing over 
£4000 was void if mobil 1 was used. This engine knock occurred only 
several days after filling up with the coma synthetic 5w 40. Another 
thing I noticed is that the oil was very thick and very black when I 
drained it yesterday after only several hundred miles. 

So now I need some advice. 
>From what my mechanic was saying even getting a good original 1.8 16v 
is going to cost big money.  Does anyone have any idea on how 
realistic it is to fit a vr6 or 1.8T engine. On both is it just a 
matter of buying a new subframe and bolting the engine/gearbox in 
and use its' driveshafts in the mk2 hubs? Do the wiring looms fit and 
integrat nicely? And do things like modifying the clutch 
linkage/exhaust manifold + downpipe/speedo cable all turn into 
nightmare jobs? 
And what is the estimated final cost for a conversion like this?
Does anyone else have any suggestions on what I should do?

It's hard to know what to do with a £2k car where even the 
original engine is going to cost ££ to put right. 
Basic car is immaculate though. 

Any suggestions and advice would be appreciated.

Cheers

Ed