Sorry to hear, however it doesn't come as a surprise. The watercooled engines had quite some reliability issues. One hardly finds these models with a similiar mileage as the previous aircooled ones (or the 944 and 928 models). As Pierre said, search for an alternative to get the car fixed.

So far I have heard from replacements between five and ninethousand Euros. The numbers you mentioned are simply way off, even for an OEM part.