I wonder how much different things would have been IF a compression test was actually done much earlier in the trouble shooting process.
For many auto parts stores the cost to rent a compression tester is ZERO.
The numbers you are quoting don't make sense for a car of this age. A new motor for a more than 10 year old daily driver not likely cost effective.
My current ride (2000 Mustang GT) came from a guy in a similar situation as yourself. Tried to fix it himself. Ran into problems and gave up. I bought the car and put a low mileage salvage yard motor from an 2003 Grand Marquis. Paid $830 for the motor. That was 7 years and 90k miles ago.
To bad you don't live in the Houston area. I wouldn't mind looking for a new "project".