The best thing to do right now is file a complaint with the California Attorney Generals office. After doing so call this guy, fax him your complaint and tell him your next recourse will be to call the local police next to file a fraud complaint. I think you can use a couple of the responses here if succinctly written to document the misrepresentations (original motor block/heads, etc.) and provide the police (and attorney general) any previous email correspondence. Honestly I would have offered the guy like $12,500 when this came to light before getting cross-wired with him. Even if you settle at $15K I think you would be getting a nice car at not a terribly bad price.