Propellerhead, yikes!!! was that 14k for a ferarri head!???
Ive seen good used engines go for $2000, and labour to install it, about the same.
Its always a crap shoot though, do you like the car enough to ...........
its going to be a case of diminishing returns anyway, could you replace it for the $5000 that you need to spend on a new engine.? If it were mine, (im a mechanic type) I would change the engine, and move on.
but its your call. hope all goes well!

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2003 X5 3.0i (02/2003) sport package, Sapphire black metallic / Black Dakota Sport seats. compass mirror retrofit, trailer hitch retrofit, Prodigy P2 trailer brake controller installed, PDC retrofit, Lumbar support retrofit. heated rear seats retrofitted. Running boards retrofitted and subwoofer install in progress. 4.8is Brakes installed front and back. Bluetooth TCU installed, Rear Fog lights installed. Retrofitted reclining rear seat backs.