Question on Boxster Common Engine Failures

I just bought from a local independent dealer a 2004 Boxster 2.7L 5-spd w/ ~70,000 mi, confirmed the IMS had been retrofitted, and had a new clutch. Car leaked oil from Day 1, stalled when coming to a stop with A/C on, and had unusual engine noise after an hour of driving. In the shop and out the first two months no charge from dealer but continuing problems until finally the big one: cylinder bearing gave way and spun the crankshaft, damaging it irrevocably. They tried to get it machined, no luck. So choices are: 1- Demand my money, or most of it, back no warranty; 2- Go with their recommendation to put another used motor in; or 3- Have them replace the crankshaft, seals, oil pump, etc. with new parts and put my motor back in. They say the rest of the motor is perfect and they have cleaned it up completely. They are balking on the new crankshaft because it is so expensive. I am leaning towards Option #3 because I am not confident that another motor out of a crashed car will not come with major problems of its own, and I'll be at risk. The dealer has mentioned using parts from Pelican. What is your "impartial" recommendation?

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[Nick at Pelican Parts]

This is a tough call. When there is a major bearing failure the engine oil passages can be filled with metal debris. This can lead to future failures if the engine is not completely torn down and cleaned. I think the rebuild or a used engine is a good choice. That is if they perform the rebuild correctly. If you are not confident in their ability, ask then if they would pay for a shop you trust and have a relationship with to perform the repair.

- Nick

[Cajundaddy]

A spun main bearing would be a death sentence for me on an m96 motor. Just too much grenade frag, heat and torque in a critical area. It sounds like it had a lot of issues so maybe overheat or long oil change intervals killed it. I would choose a used motor with very clean oil and do the IMS.