I mean I suppose it's possible that if you happened to have the extraordinary bad luck that the lower intake cracked wide open and coolant poured into the intake it might end up like that....otherwise you'd generally see coolant in one or two cyls and you'd suspect internal damage rather than a flooding event...so I'm assuming they saw coolant in all holes.
That begs the question why they weren't able to identify it as coolant, which seems to indicate the cooling system was filled with water only if that's what happened...this might have been your first clue something was very wrong when you bought it, if the coolant appeared to be all water or really rusty and trashy.
Possible the previous owner knew it had a problem, filled it with one of the liquid glass jacket sealer treatments and sold it as soon as it stopped blowing steam....and that temp repair finally failed catastrophically. I'm not trying to say the shops are trying to cheat you, just that this seems like a story with some hidden parts....
We may have a semantics issue that is at the crux...was it running, died and wouldn't RE-start, or you parked it and it was fine, then wouldn't start next time?
I don't know the extent of your ability, but if it was my car, I'd take the plugs out and purge it, install new plugs and see if it would start, then slowly fill it with coolant while running and try to get a feel for where the damage lies. If it ran good, I'd consider simply repairing it in-car.
But I almost have to assume that it quit running while driving, and wouldn't restart, and they found it full of water. If that were the case, I would tell the customer of the POSSIBILITY or strong likelihood that there is rod/piston damage, but obviously I couldn't confirm this without either tearing it down or attempting to clear it and see if will crank and/or run....