The mechanic is probably being quite reasonable. Tearing the engine and
drive down to find exactly what is wrong can be a substantial amount of
labor.

I have seen a few cases where a motor was torn down after being
replaced and comparitively little work required to get it running again
but it is something of a crapshoot.

If you decide it needs to be a do it-yourself job because of costs plan
on buying an engine hoist and stand. In the US about $200 total. The
engine hoist will let you remove the engine in a very controlled manner
which simply is not possible manually.