Blown Engine...not blown, fine now

[Bostonblux5]

A couple weeks ago thick white smoke started pouring out of my exhaust pipes. The engine shut off and I managed to pull over to the side of the road. When I tried to start it again it would not crank at all...

So the day before I was set to leave the country I towed it to a family friend's shop. They do not usually work on bmw's so they recommended sending it to another shop (Autobahn Auto in Natick MA). I just returned from my B-school class in India to find the X5 back at my house...still dead.

So today I briefly talked to my family's friend and he said that the shop in Natick checked out the engine and basically said I need a new one along with some other "supporting parts." They do not do the work themselves however so I'm again looking for a new shop. They estimated the damage to be about $5-7k.

I don't know too many details yet; I'm planning to go to the shop tomorrow to find all that out.

I'm not sure what to do and I was wondering if anyone had any suggestions. I read a few posts about an oil separator problem but other than that I haven't seen anything about a blown engine.

FYI its a 2001 3.0i with about 72k miles.

One idea I had was to fix it up as inexpensively as possible and trade it in at a dealership. - however my friend said that the engine must be replaced to get it to run.
I was also thinking about trying to sell it as is but I heard I will get next to nothing for it. Anyone know how much its worth with a blown engine.
The last option would be to fix it and keep it but I fear sinking $7k into it just to have it break down requiring more money.

Again any ideas would be appreciated ... as well as any rec's for shops / dealers to do the work.

Thanks
-Rob