We bought a used S120XLS about 3 years ago. It worked great, but we found that it continued to have an oil leak. A couple lift repair shops in town each took a crack at fixing it, but always failed. Our current provider indicated they knew what needed to be done.
They replaced the Trans input seal, the rear main seal, and oil pan gasket... and yep it still leaked. At which point they found a crack in the bell housing. So we had that replaced. They also replaced the timing cover and gasket and replaced the valve cover gasket. The leak is now fixed. However, now we hear a ticking noise, the lift has lost all power and barely runs. The shop took it back again to evaluate and now has presented us with a quote for a new engine. They are claiming that based on the age, (1999) the unit needs a new timing belt, the cams are worn and valves can't be adjusted any further and they hear the knock but are unable to pinpoint it - possibly #3 cylinder. They are saying based on the hours (9,731) and age - they want to replace the engine for $11,000.

From my teams perspective the engine ran fine when we started looking for the leak. And now after all this work, the unit is completely useless. I realize that the failure could be coincidental, but I don't know enough about engines to call bull $hit on this.

For those of you who are more familiar with this engine and unit, can you see a correlation between the two that we could investigate?
Do I accept the bad luck and drop another 11K into this unit or do I bail on the whole thing, sell it for parts and find something else?

I appreciate your thoughts on this.