No way. If you purchased from the original owner -AND- you can prove that the odometer was tampered with, he is in HUGE TROUBLE! Don't just throw in the towel. Yes, move along and get the vehicle in running order... but you have nothing to gain by letting this guy off the hook. Look at the back of the title.... he signed it and verified that the odometer reading was correct.
Carfax claims that they have some sort of $5000 guarantee regarding their info. Look into that as well.
Also, go to the dealership and ask them for a history printout of the vehicle. I think it's called a VMI. Any service guy should give you that. It will include all info about your car including the engine number.. which by the way is a different number than the VIN... in case your mechanic did not know that. Take the information and compare it YOURSELF to the numbers on your vehicle.
Also, before you go to the dealership, get the number off of your engine and see if they can find out where it came from.
With all due respect folks... you just don't roll over and play dead every time you're screwed. If you don't win, nothing lost except for your time... but the experience will be good for you and to share with others in the future. Also, you don't spend forever in small claims court. That's what it's there for... quick decisive resolution on issues of small $$$ amounts. I think it is $3000 now.