1997 Subaru Outback ..what's that noise?

The only way to describe the sound that came from under my hood that morning was metal on metal. Didn’t even get the normal click, click from a dead battery. Just had the oil replaced a month before but the stick read LOW oil. No spots on the driveway, so the engine seems to be eating oil. Ended up having it towed as it wouldn’t even jump start. The dealer (SUBARU) tells me it’s going to cost me $2700.00. I wouldn’t think that this was bad but only 2 years early I paid the much for a head gasket replacement. This car was suppose to make it to 200,000 miles and I’m only at 114,000. WHAT TO DO???

am I crazy to have it repaired??

Would appreciate any help as my guy friends look at each other and all they say is " doesn’t sound good"

From your description it’s not real clear if the engine was running or you just heard the starter trying to turn a locked up engine. I am guessing that the engine was locked up due to low oil level. If that is correct then a used replacement engine with labor to install it would be about the price quoted you. If you really like the car and want to keep it for at least several more years then I suggest you may want to get a rebuilt engine from CCR and have a 3 year warranty for the engine. They are a very good outfit. Here is a link to their website.