ok So I should look for a new engine...

What about this?
http://www.necoengine.com/alternative.html

They gave me an engine estimate of $2600. I guess the engine is remanufacturded, and the take all the stuff off of mine; alt, water pump, supercharger. Most of those parts are new anyways.


How much should I be looking to spend?

$2600 seems high to me? How bad is your engine and have you taken it anywhere for an apraisal? You could have your own engine rebuilt with some very good parts for that kind of money if the block and heads are good shape?