What is your question?
Car has 239K miles. Took it to mechanic. They said it needed new timing chain. Repaired it for $1200. Drove away and next day it was making noise even louder than before. What should I do? They said I need a new engine and that they repaired the problem they said they would.
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I think they should take some responsibility for their diagnosis and repair attempt. The only exception is if they informed you of the possible risk and you signed off on it anyway...but it doesn't appear that this is the case... Doesn't mean they should buy you an engine, just that you should have some recourse for the money spent.