K12 engine rattle - oil starvation

Last year I bought my wife a 5-door K12 SX - it has been no problem... until she told me it was making a rattling noise. I listened to it.. and there was a quiet regular mechanical knocking. I thought about this for a day and then suggested she let the garage listen to it. Holy cow! The sump was dry! She says the warning light did not come on.. and the warning light bulb is working. But it sounds like it has been run dry and burned some bearings out. From the pitch and frequency of the knocking it could be the little-ends. The main deal now is that the garage is quoting £1500 for repairs. WTF? I am loathe to scrap the car as it cost £2500 but.. I didn't imagine it would get run without oil when I bought it. Would it possible to just get a replacement engine and slip that in? I have tackled engine replacements in the past but from general opinions of the K12 I could just be pouring more money into a troublesome car.
 
Had a listen.. it seems more of a whirring... and is intermittent.. and doesn't seem to synchronise with engine revs.. I am beginning to think it is the K12 timing chain issue.. though I have never heard one of them for comparison
 
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