Name and shame the scrapyard this offered you £60. I dont know what was said in the telephone conversation but after the £60 remark my second word would have been 'OFF'
A second hand running 1.8 should only cost several hundred, yours is the early 1.8 with dizzy cap, MEMS 1.9 ECU, any Rover 1.8 with dizzy cap is the same. You could even order one from the mainland and pay about £75 freight charge. Turner engineering will exchange your engine with a fully re-conditioned one, around £1500
Search for a thread entitled '1.8 more info' by the MAD HAT MAN, there are LR technical bulletins you should look at for the figures, esp bulletin no. 0036. This will let you know if the engine is within tolerances. I cant understand why it wont turn over, warped plastics fouling the timing belt?? melted wiring? It should all be inspected before condemning the engine.
Dropping the engine is straight forward, i have a thread 'freelander clutch options' shows all in the thread.
Sorry can not cut and paste links via mobile.