Once it's outside i'm going to access how the parts are and how well everything is labeled and put together (i'm assuming he will just put everything in the dump box) and call a shop about cost to rebuild, and ask if they would take over someone's work and get an idea if it might make sense. I think the engine parts would be the biggest concern, i'd imagine anyone who regularly does engine work could throw the accessories on blindfolded, the hardware if it isn't labeled well could add up nickle and diming i'm sure. If I did decide to just scrape the truck i'd probably just send it to auction, or call a wrecker and see what they'd offer for it in pieces. I am going to assume 99% chance the head, head gasket, and spacer plate will be kept in his shop.
He hasn't agreed to budge on anything and doubt he will. It's in his best interest if I fix it though, because then i'd pay him the $2500 for the frame, if I scape it I won't pay a penny for it because it's of no value.
If the engine isn't wrapped up and protected I will do it and take the truck right away. It would definitely ruin it in short order, as the oil pan is off too.