Same thing happened to mine back in Feb (2.0L TS).
Decided to get the engine stripped and rebuilt (as I believed it would be cheaper + couldn't be hassled notifying DVLA of swap).
Runs as sweet as a nut now ;-)
I had to replace:-
Crank (mine was cracked)
Valve Stem Oil Seals
1 Con Rod (which my garage kindly gave me for free)
Timing belt & kit
On top of that:-
Only thing is this:-
I'd only just bought the car when my engine blew but it was using loads of oil (1L every 500 miles!!). Figured a rebuild would curb the oil consumption. Not so I'm affraid, still as bad as ever!! No blue smoke out of tailpipe from cold or under hard accelleration, so to say I'm perplexed would be an understatement to say the least!
Still, my car starts 1st time evry time, goes like the clappers and returns decent MPG so It'll do me!