I think if they intend to just drop in a used motor without even resealing it they are screwing you over.
It might be worth your time locating a reputable shop willing to do that and replace the bearing.
Dropping an old engine in will definitely be cheaper, but you'd just be back in the same boat you were a couple months ago.
If it were me in your position (I sort of was in a similar situation) and if I had the means I would get a hoist and a few friends buy and swap the engine yourself, then hang on to the old one and use it as a learning tool, attempt to repair it.
It's a lot of work and it may take a long time, but provided you don't drop the engine you'll save quite a few bones.
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