In your opinion, is a motor replacement easier than rebuilding the top end?
I've never rebuilt the 500/550 top end, so I really can't say...but I've pulled two engines out and put one in, with only removing the oil filter (leaving the sump and exhaust studs intact), and I've cut the time involved down considerably...but I cheat; I use a chainfall (just a little one!)...
Just on your comment about the engine bogging before dying, I would suspect the piston in at least one cylinder seized...if the cam chain had snapped, it would have died instantly...a valve bending or breaking sounds likely, but again *why*

The spark plug being mashed sounds bad...something has to be rattling around in there to do that...
It just sounds very expensive to me...a replacement engine and some routine maintenance on it sounds a lot easier...
There seem to be a lot of these machines coming into the salvage yards every day now...
In any event, good luck to you! Whatever path you choose will be very educational!
