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Hey 30tudor,
Kronke Rebabbitting is in your 'vacinity' (Iowa). Call him and talk to him regarding your situation. He, most likely, has read your tale of woe and horror regarding your monster engine mess.
If I lived in your area and needed help, Kronke would be one of two choices in that area for A/B engine work.
Know that you are not alone in your situation and what you have experienced. I will say that at your age and experience(mechanical)...that you should recognize the smell/sound of BS...and walked ! Sorry to learn that another rip off has occurred. This 'rebuilder' should be taken to task and at the very least, if true, you should let others know who it is , so that they may not have same bad experience.