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I feel your pain. Same thing happened to me 10 years ago, similar anyway. Regarding fix or sell as roller. I had the same issue. 10+ years ago there were no reconditioned motor options but Boxsters also had higher resale values. Was either $15k+ for a new factory motor or sell as roller. I did the latter for $9k.
My knee jerk reaction is to take the $4k and find another car. The values for these cars are depressed so you can find a pretty nice one for less than even a few years ago.
Good luck. Hell, your engine might even be ok and all this is for naught. Who knows?
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