94 grand am se engine knocking hard

I recently purchased a 1994 grand am se at an impound auction. the first probelm I noticed was the dead battery. I slipped in a new battery and started her up, but the enigne make s a horrible knocking noise. I towed the car to a small shop and asked them to look at it. They determined that the noise was in fact coming from inside the engine, and that something was broken, (possibley a rod, shaft bearings I dont know) and they wanted to replace the entire engine at a cost of $3200.
When I asked if if would be better if I took the care to a larger shop or dealership to tear it down and fix the problem they told me that it would likely cost me the same if not more to have it done. Is this right, or are they jerking me around? Any ideas what the problem is and what it would cost to fix, I dont have alot of money to spend on repairs

I don't really know .........but I have a 94 grandam

and its a crap load to do anything to it.......

Im in the mist of needing a head gasket and water pump replaced

goodluck with it

Sorry to tell you, but your in trouble. That knocking noise that you hear is your shaft bearings. DO NOT run your engine in that condition. Most likely your pistons sleeve/rings are gone by now. I know this because i had the same problem on my 94 grand am SE. My oil pump went out and i didn't get a chance to notice my oil light go on and all of a sudden my power dramatically dropped while i was on the freeway and the knocking noise began. I paid a 1000 to get my engine rebuilt and now it works as good as new. They basically resleeved my pistons, new shaft/bearings, and bored out the block. I have a Quad in mine.