At the mileage you listed, the diagnosis is likely correct, but normally worn engine bearings coincide with chewed-up crankshaft "journals". Those are the highly-polished surfaces the bearings ride on. Chewed-up journals will immediately destroy new bearings, so it is standard procedure to replace the crankshaft and the bearings at the same time. The next problem is you must hope all metal chips and debris made it to the oil filter and got trapped there. If they manage to circulate through the oiling system, they will also cause further damage.
You have a slightly different story. If this has been going on for a while, most likely the bearings simply worn down, but are still highly-polished. The excessive clearance that has developed is what lets the pressurized oil flow out too easily, and that is why the pressure is down. The oi flows easier when it gets warmed up and becomes more fluid. That's why the pressure goes down even more when the engine is warmed up. Increasing engine speed causes the oil pump to pump a higher volume of oil, which helps the pressure to be maintained, so it goes back up toward normal. This is a case where the journals are likely still okay, and installing a new set of bearings has a good chance of permanently solving the problem.
There's no way to know the condition of the crankshaft journals until the oil pan is removed, and the bearing caps are removed. Even if a visual inspection suggests the journals are okay, replacing the bearings is a gamble. I did this exact repair to my '88 Grand Caravan many years ago in an unsuccessful attempt at stopping an annoying knocking noise. The old bearings were fine, and the new ones didn't solve the problem, but the engine ran fine for another 200,000 miles until the van rusted apart so badly, the carpet was the only thing holding the front and rear together!
The other important detail to be aware of is Chrysler built a real lot of tough engines over the decades. The 2.7L is not one of them. In fact, coinciding with Chrysler's uncommonly good reputation for parts interchangeability between models and years, the 3.5L is a much better engine and will drop right into your car. It will use the same Engine Computer and wiring harness. If you're going to go with a replacement engine, what's to stop another 2.7L from suffering the same fate? The 3.5L would be a better choice.
$1500.00 seems a little high to just replace the bearings, so I'd double-check on what else may be included in that estimate. They may be planning on also replacing the oil pump, timing chain and guides, and things like that which could increase the reliability of the repair. Also be aware the original quote was likely for a factory remanufactured "crate" engine, for which they could offer a warranty. While the bearing replacement might be successful, it is likely they won't warranty the job, simply because it is such a gamble with an uncertain outcome. Most shop owners know you will be unhappy with a $5500.00 bill, even if you get another 200,000 miles out of the car, but they also know you will be MUCH MORE unhappy with a $1500.00 repair that goes sour. They always get in trouble in the long run when they try to cut corners or save you money in any other way. The issue here is mechanics, just like people in any other profession, have very poor communication skills when it comes to working with car owners. Instead of magically coming up with the less-expensive alternative to the first estimate, they should have taken the time to explain WHY they decided to offer you that alternative. Their explanation should have included why they went with the higher solution first, then came up with the lower-cost solution later. They are trying to keep your business by offering the lower-cost gamble instead of the higher-cost sure thing.
As for the knocking noise, that IS going to get worse until the engine destroys itself. How soon that happens depends on a number of variables. Imagine placing your fingertips on a table, then dropping the head of a hammer one inch onto them. That won't hurt, but it will be uncomfortable. As the bearing wear slowly increases, the clearance becomes greater. Now it's like dropping that hammer head two inches onto your fingers. It may have taken a month for that clearance to increase from one inch to two inches. The pain to your fingers only went up a little, but the harder hammering action made them start to turn red. Within another week, the bearing clearance increased even more, similar to dropping the hammer six inches onto your fingers. Now, more wear will take place in a few hours than took place in the preceding months. The rate at which the wear occurs multiplies greatly, to the point other parts of the engine that need oil pressure are also damaged. At that point simply replacing the bearings will not restore proper operation. Your mechanic has to hope that point of no return hasn't been reached yet. He is risking his reputation by offering you the less-expensive repair. If that repair is not successful, we know who is going to be blamed, and so does he.
Monday, March 27th, 2017 AT 2:11 PM