Hi Deborah,
I understand all of your concerns, but you do need to be realistic here.
No-one in their right mind would seriously pay £4K on such repairs on a 100K 10 year old SLK.
If the company (SL Pagoda?) who are offering to supply and fit an engine do the work, it must come with some sort of warranty. That's one of the advantages of using a registered company for the work.
When the costings were suggested for the work, the chain, tensioner, gaskets and a few valves, plus labour, were worked out to be as much as, if not more than this first route.
Please don't think I'm trying to be awkward but you've got to look at it this way. No matter what has caused the chain to snap, and thus the engine to run without correct valve timing, the results are going to be the same. It's going to require quite a lot of work and will cost quite a lot to fix. Your engine will be in no better state generally than before it snapped and it'll have this incident plus 105K miles of wear and tear under it's belt forever.
In an ideal world you'd say that 100% of mechanics would also re-assemble it just as well as it came from factory, but this isn't an ideal world and there's always the possibility of future trouble. Did the conrod get bent just a tiny bit, is one of the sprockets now stressed and waiting to let go later down the line, has the head been removed properly, checked for straightness and re-fitted perfectly with new head bolts torqued as per new?
I'm not anti-repairing things, I've rebuilt the top-end of my own engine only a few months ago, but that is a specialist car (Cosworth 190E) and there is no ready supply of low mileage, trouble free engines for these cars.
If I was local and had time I'd take the valve cover off to show you/see for myself roughly what's happened, but that's still not going to show you the full picture. That'll only be revealed come stripping the head and dare I say it, until it's been rebuilt and run for a while to prove the job really was a success.
Good luck
Will