So Frustrated!

it sounds like the guy who sold you the engine said whatever he could to get your money... i hate to say this but the salvage yard guys are usually more honest than your craigslisters, ebayers, etc.

i would not suggest doing business with that individual in the future. at least your machine shop was honest with you and it sounds like they actually did check the parts out (something every good machine shop does before letting someone invest $$$ in parts)