Unfortunately, most people scream and shout, maybe even stamp their feet.....then just let it go.....and THAT is the reason these scumbags proliferate and profit! I seriously hope that you drive this moron to the ends of the earth and absolutely, sue him in small claims court. As other have pointed out, be methodical and accurate with every single document and contact a local branch of a couple of the Hod rod or Vintage car clubs....once you explain what's happened and can show some knowledge, you might get them to appraise your bike at real values. I only suggest contacting a "car" club because these clubs are nationwide and have more recognition then the Vintage bike clubs but either way, you will NEED that appraisal. Remember, the judge who hears your case will prob not be a rider so things that we all take about as second nature, he won't have a clue....so remember your audience and plan your evidence accordingly.
Lastly, post up with your results....there's no doubt in anyone's mind who reads your thread that this guy is nothing more then a flim/flam artist and as much as we think it would make us feel better, beating his a** really won't.....and it won't change him or get your engine back but if you start removing things important to him, it WILL have an effect so when you write your "demand letter", copy it to his place of employment Attn: Management......because you want to be sure that he gets it....so if his boss hands it to him, he will! Of course you can snail mail several copies to him with his neighbors's addresses too.....and don't worry, there's no libel when he can't prove financial or reputation harm and you can print enough threads from enough forums to show that his reputation, through his own actions, is scum.
Good luck,
jeff