I don't know what's involved with the magnafluxing process, but hot tanking is usually $100 or so.
In the hot tank (which actually isn't hot anymore), they dip the block into a caustic solution (usually something very acidic). This solution degreases the outside, breaks the calcification off of the inside of the water jackets, and loosens any garbage out from the inside of the oil galleys and such.
I would never consider getting machining without a hot tank.