2003 Passat, 1.8L -bad engine, 125,000 Miles

[Rmasters3]

A friend has a bad engine-dealer wants $1,000 to determine the cause and they suspect the sludge issue. Friend can't produce oil change receipts, so he's talking about selling. My understanding is he's had the various recall items done-heated seat, fuel pump, etc.

I've got a good engine replacement guy ($700 labor, more or less), so I'm thinking of buying the car & finding a used engine.

Is it worthwhile (does the vehicle have enough other issues that it's too risky at 125,000 miles)? If I look for a good used engine, does anyone know a benchmark price? Do other years than 2003 drop in easily?

I've done this before an an Isuzu Rodeo with good results, so I know my way around this, but I'm pretty much unfamiliar with the Passat.