interesting...
ok so, this is still just my opinion, but based on the block being cracked where the block's mount points are for the engine mounts, and keeping in mind the engine mounts are designed to take the stress of the engine's torque (which discounts the engine doing this too itself), i'd say the rollover caused the cracks either outright, or left fatigued or bent mounts so severe that after some normal driving, bumps, etc, one or more of the mounts gave way, and whatever wasnt cracked before cracked then. VW dealer or Geico should have caught the fatigue in the after-crash inspection. they may have been hard to detect, but thats why there are people trained to do this kind of work.
the transmission cracking along it's length... thats a little crazy. however, the stresses it could have been subjected to as the car rolled would be significant. the case is aluminum i believe. and though its thick, it when being compressed or pulled apart, it could crack. Its not designed to be a structural member. so when the car rolled, a lot of force was conducted through that case that it was not designed for.
i think you should check TSBs etc for your question of whether the engine is too much for the transmission. i'd tend to doubt it - i would think that people would have been all over this thread reporting well known problems, and that there'd have been a recall if that were the case, and folks would be telling you about it.
as to the need to replace pistons and other engine internals. at that level a diesel is not really different than gasoline engine. the differences are more around compression and ignition of the fuel. from a rotating mass perspective: crank, connecting rods, pistons, the diesel stuff does the same thing the gasonline versions do. so replacing them isnt a diesel thing per se. not knowing exactly what of your engine they are keeping vs replacing, it may be that you are highly recommended to replace pistons when replacing w a rebuilt block so that slightly oversized pistons may be used, allowing the replacement, used block to be bored out, thereby correcting issues which may have developed in cylinder walls during its original period of use. Or it may be that the loud "thunk" you referred to hearing was itself or was quickly followed by very bad things happening in your engine. e.g. serious overheating, or maybe damage to the crank, which caused damage to the pistons connected to it.
i think its worth asking exactly what they are replacing: are they getting you a new engine? a rebuilt diesel long block? just a new block and pistons? get the scoop...
you sure are lucky Geico decided to cover it - i cant believe they didnt just total it and cut you a check. whats the retail blue book value of a jetta with your year and mileage?
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Pat Herman
2008 R32
1991 Range Rover Classic
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