The original work was less than a year ago, is it still under warranty?
If the original work isn't still under warranty, this mechanic doesn't seem too competent, if it was just a guide and the chain didn't slip, the engine would have made a rattling noise, not broken down. He should have known this, every engine since the 60s has been interference. (I just replaced the chain on my 86 toyota, it's also an interference engine)
On top of that his prices sound like he's taking you for a total ride, I'd be finding someone else.
Used engine heads should set you back a few hundred I would think??
Start calling other shops in the area and tell them the vehicle and that the chain slipped, get their estimates for repair and for simply replacing the heads.
After doing the minimum to get it repaired, absolutely sell it.
There's a hard lesson here, when you had the first mechanic "replace everything", sure, the parts were new, but most aftermarket parts are far less reliable than OEM parts, hence the current situation. Who knows what else may now fail prematurely. Also it's a Dodge, brand wars aside, it's factually statistically less reliable.
Sell it before fixing or sell it after fixing, either way get the most reliable toyota pickup you can without going into debt.