I agree TT, beating the craap out of someone is ok on TV or in cartoons, because next day you're not sitting in jail waiting for him to die so you can be charged with murder, or worse still, sweating at night when you should be asleep, waiting for someone to put two and two together and realize that you're the #1 suspect.
I think that a confrontation is inevitable, but my advice (for what it's worth) is to set up a meeting with your superviser as mediator, and tell the guy that you want financial compensation for what he's done, (for your time and effort to properly strip and clean the engine, whether you actually DO the work is optional) or, you'll return the favour and pour a can of POR15 paint into his engine, first chance you get.
That way he can't say he wasn't warned, and you remain the good guy, in the eyes of your employer. Cheers, Terry.