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There are a lot of possible courses to take. I don't think that any of our advice will matter much. It's more about your particular aspirations and aptitude.
Being free and clear of it and having the money is a great option if you don't want to deal with it any more, and don't have space to temporarily keep a wrecked car. Shop for a nicer 986, or move the money on to the next good thing.
In most cases you are not going to get a 'run and drive' 986 for under $2000 in an auction, especially after fees.
Retaining the car I see two options that would work for me: Pull the engine and transmission, then sell the roller. (You can never have too many engines and transmissions) Buy another similar car.
Fix it enough to be a good driver, but not back to perfect and enjoy it with less worry about door dings and foul weather drives.
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I am not an attorney, mechanic, or member of the clergy. Following any advice given in my posts is done at your own peril.
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