I can't see any reputable shop doing the job that cheap.

Assuming the mechanic wants to pass the engine on at trade (his cost, no other industry I know of does this) then they're still close to $3k bare.

There's gaskets, seals, cylinder head facing (at a bare minimum, possibly valve seats, stem seals, tappet setting) Oil pump overhaul (I'd renew it as it's munched metal) Timing belt (possibly the timing idler kit) Oil, filters, coolant and labour.

Then there's all the "while we're doing it" stuff like injector cleaning, radiator cleaning, clutch, flywheel machining, coolant and fuel hoses.......etc.

New 207 I would say upwards of $6k installed. A secondhand running engine from a wrecker's yard would be the $3.5k (installed) option I would think.