If you think they were correct to charge $4k for a replacement engine and $2k for labor then I guess I'm in the wrong. Especially since I researched replacment engines and found a few for ~$2k a year ago. Additionally, you're focusing on how you suspect they may have gone about on doing a compression test while completely ignoring the fact that they told me "the timing belt is broke". They said this! They didn't say "could be a timing belt issue and we did a compression check to get some data and make an informed decision as to the best course of action". No, they said, verbatim, "The timing belt broke".
So when I took the cover off and the timing belt was completely intact they lost ALL credibility. If you want to continue playing devil's advocate to a sleazy towing/repair shop 1500 miles away from your location when you were not in any way, shape, or form involved in the discussions, diagnosis, and outcome of my situation then have at it. All I am doing is passing on MY experience in this particular situation so that others can be better informed.