As it turns out, the engine diagnosis showed that the engine had sustained damage but it was NOT unsalvageable. So the total cost to dissassemble the engine, repair it, replace the gasket and the water pump, then put the whole thing back together, is $4100. I think that's much more reasonable. If it seems high I think it was because I did not understand that the additional cost to disassemble the engine was factored in.
Respectfully,
Brian P.