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Frank,
This a bad situation that is getting worse. Sorry this is happening to you man.
My advice is as follows:
#1 - Loose the mechanic who currently has the car. He has displayed way to many behaviors that indicate he does not have your best interest at heart and that he is not competent to work on your car.
#2 Stop with the certified mail. All you are going to do is piss him off. Instead, once you get the car back and are far away from this guy, report the incident to the authority having jurisdiction (in CA we have the Bureau of Automotive Repair). At least you can get your dissatisfaction on record and if enough other customers have complained, they may even do something about it. If you are going to go legal on him hire the best attorney you can find and be prepared to pay way more than what your out now in the way of aggravation pay. I have learned from my past legal battles that one must chose them wisely, and it’s good to loose the urge to teach people a lesson. If you must sue, do so for money, not revenge. I have had the misfortune of having to sue a few people before and it really is absolutely no fun even when you win.
#3 Have a good mechanic that has a lot of experience working on Boxsters take a look at the car and provide you with a written estimate for repair. If you don’t like the next one, get a third.
#4 Selling the car “as is” is out of the question, you will be money ahead to get it repaired first, especially if you get away with just a head gasket.
Getting a factory reconditioned power plant installed may be the only answer if you intend to keep the car but that depends on how the next diagnosis come back….
In any event best of luck to you with the problem.
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