I got my engine for 100 , and it came with a crappy frame!Only $800 invested eh... well, most of the time, you can get a replacement engine for $100 - $200 that the used shop will tell you "it came from a running bike". So, yeah, why was the bike brought to your establishment? It's such a hard decision to decide too much invested to just quit. Unless you find that used bike (crashed bike) that really does have very low mileage on the clock, it's hit and miss with replacing the engine, but for the work you're thinking of doing, $200 for a new to you engine - worth the gamble imho.
I think you should get a newish engine, open her up, do the triple bypass, and call it good.