you need to ''man up'' and realize this guy will only take your money and suck you dry.
pull your car out of there and learn to do it yourself, we all started someplace.
you will lose any money paid, he will hold you hostage over the motor work, but he hasn't paid the machine shop anything yet.
talk to the machine shop and see if he will work with you and if he can do most of the rebuild
having a shop restore a car can be a money pit, most of us here diy, that's why sites like hotrodders.com exist.