Jeff,

Get a 22mm 1/2drive socket and put it on the crank pulley bolt and try to turn the engine. If it doesn't turn you are in deep sludge. If you got enough water into the engine through a blown head gasket you should see some evidence in your oil. Check to see if your engine oil smells like gasoline. I had a fuel injected VW once that had an injector stay open and flooded the engine. Literally had fuel pouring out of the intake box. Flowed right down over the hot heads. (Is boiling gasoline dangerous?). These engines are nearly invincible. I had a '79 station wagon that I RAN OUT OF coolant and drove for a mile until the engine clattered to a halt. I replaced the broken hose, filled it with water and ran the car another 30,000 miles before trading it in. This is the same car that was in a flood. Filled the engine with dirty river water in a storm. Had to remove the plugs to even think of turning it over. DON'T let the dealer rape your wallet, ask for some evidence.

Just my opinion.

By the way, I got ya beat on rear wheel bearings. I've had mine replaced 5 times. Got my fingers crossed on this last set.

I wish you the best of luck in the mean time.