At this point, you might do better to pick the car up and take it somewhere else for a second opinion. If it really is just a blown spark plug and they told you the motor was toast then I wouldn't expect any honest work out of them. The odds of you having thrown a rod or some other catastrophic failure is tiny and the odds of you shooting a plug out of the head is much, much greater in comparison.
Did the shop give you anymore info other than the it's toasted? They should be able to give you more information than that, even before tearing the motor apart.
Even if the motor is toast, I'd want to verify myself that none of the plug holes are damaged and it really isn't just that before giving the OK for an engine replacement.
I've dealt with shops that were less than straightforward before and I, and my checkbook, have regretted it. This place may not like being second guessed, and they probably are not going to want to be talked out of a high $$$ engine replacement job.
Good luck :chug: