With what engine would it be replaced with for that price? A used good engine or is this a new engine replacment with no miles?
Did it run when before? Does it run now?
Blue white smoke? Grey white smoke? Or white white smoke?
At that price or even a little less, it's a total loss and I would move on. If you knew or had the energy to attempt a engine swap, it would be about a grand, maybe a little less.
My advice ( like others) go to a tdi specialist. Avoid any shops that are generic or dealerships. Your car is too old to be handled in that way.