If he's seeing bent rods, and/or a broken crankshaft, then the timing chain probably broke, or worse. Either way, it obviously needs an engine. If you can do the work yourself, it's DEFINTELY worth it to save an otherwise nice 240D. There's often parts cars for sale on this forum, there's eBay...I've got a couple of connections here in Atlanta, GA too, so I might be able to help you find an engine...The 240D has plenty of room to work under the hood and around the engine...swapping in a good used engine is not a difficult thing to do, if you have a few tools and an engine lift.
I'd go for it if I were you. I can't imagine turning down a FREE 240D, if it's nice!
Mike