Nothing you said suggests there should be coolant in the oil. If you do a lot of short-trip driving, there may be a white, milky substance on the bottom of the oil cap, and the dealer's mechanic may be basing his diagnosis on that. The other clue is the oil level would be substantially over-full and the oil would look like a light brown mud. If neither of those are true, I would seek a second opinion from an independent repair shop.
Some cars are really miserable to work on and to get to the needed parts. In those cases, a mechanic may be inclined lean toward a total engine replacement which can actually be easier than repairing what you have now. To throw in the towel right away before running up your bill for diagnostic time might be seen as a way to save you a little money and insure the quality of the repair. Also, mechanics at independent shops get to see every car model and they can compare them. Their feeling often is the dealer got the "gravy" when they sold the product, now send it back there and let them deal with the, ... Uhm, ... What gravy turns into!
Without knowing any more than I do right now, my choice would be to have the water pump replaced and have the oil changed if there is any question about it. Since the engine was running to drive the car to the tow truck, it likely simply stalled due to being really hot. There can be other problems yet to be discovered, like a leaking cylinder head gasket, but the engine could also have no other problems and will run fine. (The Ford mechanic may also have been worried about a warped cylinder head / leaking head gasket. That is another expensive repair that involves working on a totally different area of the engine than the water pump). He sees a lot of the same models over and over, and experience may have taught him that replacing the engine is what is in your best interest in the long-term.
Tuesday, July 14th, 2015 AT 4:54 PM