Wait, so he sells you the motor, does the work and when there is a problem he says no warranty go away..... If that's the case that's terrible, you should look at your receipt from the shop for the warranty info. You might have a much better case than I was initially thinking. Keep in mind I'm a mechanic not a lawyer, it just sounds like this dude took you money and now doesn't give a damn. Also if you have full coverage on your insurance it is possible that they would help you out.
I would never do this to a customer, the shop has insurance so if we blow an 8K motor or drop a car off a lift we can have the repairs made for the customer, using our insurance, but I have heard of incidences where a shop drops a car off a hoist, or totals it and tells the customer to talk to his or her's (the customers) insurance. They do this because the shop doesn't want to risk a insurance rate increase, instead it becomes the customer problem, which is a terrible thing to do to a customer, but I'm just saying that might be an avenue if you don't want to take the shop to court, but if this engine turns out to be toast, you could possibly recover some money though your insurance. Again only if you have full coverage.