It might be in the crankcase
You’d have to carefully drain the engine oil into a clean tub. Then it would be fairly obvious, if we’re talking a large amount of water
The proper thing to do . . . in my opinion . . . would be to run the engine until proper operating temperature for all the fluids was reached. Then carefully maneuver that clean tub into place, so that you can capture all of the fluid(s) that drain out
I’m saying this because if, say, an engine has a bad headgasket or bad lower intake gasket, in the case of V-engines, not all of the coolant will get burnt up. Some of it will find its way into the crankcase. And when you drain the fluids into a clean tub, it’s clear that there’s other fluids besides engine oil.
How did things go in this direction?
Last time we heard about the field engineer, his position was pretty firm. Sounds like he’s willing to entertain other possibilities. Or does he merely want to make sure it gets diagnosed correctly?
Will what’s on your recording(s) be “admissible” later on, if need be?
Is the dealer and corporate yet aware that you are in fact an attorney, and ready to start sending sign-on-delivery type of correspondence? I think somebody on this forum refers to them as “demand letters” . . . ?
As for the engine being taken apart . . . does that look like it will happen?
If it does happen, and the rods are bent without a doubt and there is water in the crankcase, I still think the damage occurred before you even bought the car
If so, I suspect it happened shortly before the car was traded in, and perhaps when you bought the car, not enough drive cycles with the fault recognized had occurred for the fault code to “mature” and request the check engine light to be illuminated