Engine Problems... Toyota says its Blown :( Options

[94celigts]

Hey guys i have a 5sfe with 250000km on it. I did an oil change not long ago last week actually and everything went fine untill yesterday... My oil light started coming off and on again, so i checked the dipstick was a tiny bit low so i topped it up. Now my oil light is on constintly and my engine is making a terrible knocking sound like a diesel but only under 1500rmp anything above it runs fine no chug or anything. I was told at toyota that my engine is blown or about to blow and more then likely it is the rod bearings that are out.. but they only said this without checking into anything deeply. They quoted me 2300$ for a 91 5sfe installed and everything. My question is, is it hard to determine what the problem actually is? because if it was something cheap internally in my engine that did not do much damage then could i not just take apart my engine and figure it out? I wouldnt want to pay for a new engine and find out that it was a 100$-500$ repair. Let me know your thoughts or what i might be able to do to figure this out... i really love this car and i do not want to part with it yet.

Thanks for your help.

[94celigts]

thanks for all the info guys... i do feel comfortable doing a normal 5sfe swap ive done hondas before and i dont think just the engine should be hard... but i was now thinking while i have it out maybe throwing in a 3sge and possibly a 5 speed. but i dunno how hard that would be well basically just mounting the resivior and all the lines and to make sure i get the axels and the proper stuff... and to make sure its all in working order. Basically i only have the long weekend to do all this as well so the tranny might be on hold again...

But what do you guys think about a 3SGE swap, to my auto 5SFE Transmission. Is that difficult or basically plug and play... and is everything from my 5S going to work?

Thanks again for all the info