Well, we gave the car to our dealer, and they talked with Daimler Chrystler. Turns out my oil pump was shot, and now they are agreeing to pay 1/2 of the cost. The dealer is gonna buy a new short block, and then rebuild the heads and whatever else needs work. Looks like we'll be paying just under 2 grand for everything, which is certainly better than $7500.00, so i'm happy.
Moral of the story: If something costs $7500.00 to fix, whine alot and DC will pay for it.
I'll let you guys know how it turns out. Thanks for your support in my earlier threads, just goes to show what a great forum this is after all (happy 2 yrs!).