It seems you have given him every opportunity and he has done nothing.
Take him to court.
If your engine was shipped to you and your in another state, you can sue him in your home state and he will have to come to you.
With the problems he has had even if you get a default judgement (he doesn't show) you will have a hard time getting any monry out of him.
My advice is find a competent builder local, get the engine repaired and chalk it up to a bad experience.
Sorry you fell prey to a bad deal.
The internet is full of them.