Advice after leakdown test 2.0 TDI bkd engine

[snowbus]

hello!

i have had a bit of a saga with my mkV TDI.

firstly i got it, it blew a little smoke on full throttle, i didnt really care too much. kept it serviced, topped up with oil and ran fine still getting great fuel economy.

then it started runnign a bit rough at around the 250k kms mark, so i got a timing belt put in.

a few weeks later, she wouldnt start.
replaced EGR
replaced Crank and sensor,
and put a new battery in it.

after i put the crank angle sensor in, she started and ran a few times, but the CEL came on, and my code reader isnt great so i took it back to the mechanic.

the mechanic did a leakdown test, and diagnosed cylinders 2 and 3 as having screwed exhaust valves. Which is evident by the back pressure which is now audible in the air intake box.

According to the mechanic next step is to drop a new engine in there.

i am pretty broke, and have just put the money into the timing belt, EGR, crank sensor, battery and a set of ok second hand tyres on it.

my questions are,
am i getting taken for a ride by the mechanic?

is there anyone who can do a top end rebuild (reseat and replace valves) in Melbourne?

is an engine replacement a reasonable option?

256k kms. otherwise perfect car.

thanks!

[Transporter]

Did the same mechanic tell you to replace all these parts that you did?

[snowbus]

the mechanic suggested i replace the timing belt and the crankshaft position sensor.

the battery, tyres and EGR I did myself.