3G TL engine knock => Change the engine

So, I drove it for a couple of weeks, first draining old tank, then on a new tank, then made an appt with my dealer, and left the car their for a day.

At the end of that day their service adviser calls me with the sad news that they have isolated the noise to the lower part of the engine, and that they're not going to diagnose it any further w/o me paying in excess of their default diagnostic fee of $119. Besides, according to them, such diagnostic would be pointless anyway because they never ever rebuild engines, so no matter what they find my only recourse would be to replace the entire engine, the quote for which ranges from $6K for a used one with 43K miles to $10K for a new one. The car is 2008 with 90K miles, btw.

To summarize, all they did on the car was to lift it up, use stethoscope to listen to the source of the noise, and lower it back down. No pulling plugs, no dropping oil pan, nothing extra. They ruled out the valves, pulleys and stopped. Why bother when the showroom is full of TLX?

I feel a little stupid for asking, but after listening to the noise in the above video, could someone PLEASE throw an advice on how grave this matter could be and what else I can try to confirm that swapping engines is the only practical thing?

I tried pulling plugs one by one, there is no change in the noise. There are no shavings on the oil stick, I'll try to drop the oil pan over the weekend or just change the oil and look at the magnetic plug (or is it not magnetic, am I confusing it with transmission drain plug?). The adviser quoted a $800 fee for doing the oil pan, removing the caps and checking on the bearings. According to him, just dropping the pan and looking for shavings or bearing parts to confirm the issue wouldn't be very helpful, because if they were damaged that bad or turned, the car wouldn't even run properly. And I was driving it fine up until now. According to the adviser this does sound like a bearing, not a broken bearing, but a worn one, perhaps with an extra thousandth of an inch of wear (sounds wrong or grossly exaggerated), and a new bearing would have to be fit to the crankshaft with resurfacing of the latter. Arghh. The entire conversation steered into the bearing area simply because I brought them up questioning their swap advise and diag fee. They just don't care to figure it out. Perhaps these aren't bearings at all.

Sorry for the long post. What could I try now? :)

Thanks!

[hmmm, why did the video got inserted twice??]