Was it a belt or a chain? If the vehicle was driven when the belt broke, it is probably shot. Most times the engine will simply stall when the timing belt breaks causing little damage but I have seen people actually drive them after a belt has slipped and the CEL is flashing. It really raises hell in the engine. Was it a dealer that told you this or a private mechanic? You could probably pick up a decent used motor for around $1000 at a salvage yard. Have another mechanic look at it.
There is no way of going around this. The dealer may have told you to replace the entire motor because of the extent of the damage caused by faulty timing belt. You may seek the opinion of another dealer for other suggestions.
When the timing chain fails the valves in the upper part makes contact with the pistons in the lower part of the motor. Both parts are badly damaged. You choices are A: replace with a crate new engine B:replace with a used motor from a car that was running well before it crashed. C:sell the car/trade it for another one. D:start taking a bus and walk.
It's probably the labor cost involved in rebuilding your current engine that makes it cheaper to get a new one. If you're up for doing it yourself, there may only be minor damage - couple of valves maybe. But you have to be able to check the trueness of the valves, and you might have one or more pistons damaged, possible connecting rod damage, even possible bottom end and top end bearing damage. But that's worst case. If is was me, I'd whip the head off and have a look.
depending on amount of damage it can be done. remove head and check damage before makeing decision. possible to change bent valves,head gasket,and timeing belt. done it many times and saved customer money. good luck