Sorry to hear mate. It's probably worth a 2nd (and even 3rd) opinion though before proceeding with anything.
If it was me, i would install a 2nd hand engine from a crashed Mk7 90TSI and either keep it till it dies again or sell it off. Or you could just keep feeding it oil......$8k buys a lot of oil.
VW of course wont help you with this as they will only want to sell you a new engine, so you will have to find yourself a good independent VW specialist such as Canberra VW Centre - Home | Facebook or Canberra VW Centre Tuggeranong - Tuggeranong, Australian Capital Territory, Australia | Facebook
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