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"I'm being told that engine should be replaced... can't this be rebuilt?
Anyone have/know of such a experience?"
Porsche does rebuild them. That's what you (probably) will get if you buy a replacement engine from a dealer.
What they don't do is sell engine rebuild parts to third party engine rebuilders, nor to car owners for that matter.
I have heard some discussion that this may be changing in the future, but for the moment at least, if you need a "new" engine, you gotta get it from Porsche.
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