How much to repair the crack in the block?
Option 3 sounds like the longest and more difficult to me.
Option 2 sounds like out of the frying pan into the fire.
How do you know it doesn't have a cracked block, needs sleeves or something just as bad?
Option 1 I'd consider if they could show me a video of it running before they pulled it, otherwise I'd see it as six of one and half a dozen of the other with option 2. Ten hours of driving is a lot of trust in some shops word...
With the investment of a mag drill(and maybe not even that) and the
C series kit which runs about $350 and will do a 7" crack you could be up and running with a new tool and fresh skills to boot.
I'd call and talk with them and see whats up anyway.