You've pretty much described the fatal "knock" sound that these engines develop whether it be from a spun bearing or otherwise. I sell prepped 3L blocks for about $1500 shipped. If you do the work yourself as far as pulling the engine, etc, the parts run around another $300-500 to do a complete swap over reusing your stock 2.5 parts. Total swap time is at least 20 good hours to pull, swap parts, and reinstall if everything goes well. All told if you buy a shortblock for $1500 you'll probably have another $1500-2000 in it by having a shop complete the swap. You should be able to source a complete 2.5 for about the same cost as a prepped shortblock and swap cost would be less as there is less work involved. You could probably get that swapped for $1500 or less by a shop. It really depends if you want to add performance during the swap or not.
Rick
