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I'd recommend a second opinion on rebuilding the engine too. Since that guy didn't know if you had top damage it might not have any (although unlikely). But then again it might. I wouldn't go turbo just because you have to replace all sorts of other components and add extra hardware. These engines aren't that dissimilar so bolting a turbo on isn't a huge deal, but making it run with all the software/ hardware in your car gets tricky... Oh, and they'll probably add 750-1000 for the turbo engine..
Someone one here did a main bearing job a while back, they might be able to tell you what they recommend.. I doubt you're planning on doing it yourself, but if you are know that this is a BIG job. Since you loaned the car out, I'm guessing you don't need this car at all times and could live without it for a week or two. If so you should probably call around and see if anyone rebuilds the engine and how much they'd want. Then if you want to save some more money find out how much if you bring them the engine. I'm quite sure if you do the labor of taking it out/putting it in yourself you can save yourself $1000 easy. Then again, you have to give up a lot of your time to get the engine out and put it back in, so..
Also, any information as to why it was starved is always helpful..
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