oh dear, speaking as a non-mechanic it sounds like you might be better finding someone who can fit another engine on the cheap to keep it going?

''engine overheated and boiled dry.''

This is the most important quote from the OP, if a modern engine has been cooked which boiling dry is then quite likely scrap, overheating is one thing boiling it dry is in a different league altogether.

To compound the problem it sounds like you found an incompetent garage for the original repair, axle stand through the sump is a bad joke, course it all depends what you asked them to do.

I haven't a clue where you stand legally, somehow i doubt you will get any joy down that road.

If it were me i wouldn't waste another penny on the present engine, i would cut my losses and find another preferably used lump....beware your present engine might be almost worthless to a reconditioner so add the engine deposit costs to any engine quote you receive just in case they deem yours scrap.

GR i'd be extremely wary of a used block, why would a block be for sale?...unless the best parts have been removed from it and the starship mileage block is all thats left.

Its got to be the easiest and best solution now to just drop a complete engine straight in from a write off, beware of unscrupulous breakers, you'll notice in the usual ads that used units like engines and boxes seem to have remarkably low mileages where most cars if we ever wanted to buy them have covered far more, you're going on someone else word, frequently lacking.

Have you spoken to a few VW specialist indies, if there's an alternative engine for you (VW Skoda Seat) they will know. I use probably the oldest established MB indy for my ageing cars needs, a font of knowledge and the will to do the job properly at fair cost is what keeps these places going, ask around, the various make specific forums can help you find them (though you'll find my one hard to locate via such a source we keep him secret for various reasons), indeed if you haven't already posted on a good *independent Audi forum then i would do that first.