Most common is rod knock due to a spun rod bearing. At minimum it will need to be rebuilt with all new bearings, rings, oil cooler, oil pump, etc. That is if the engine was shut off right after knock started and not run again. If the engine has been ran since the knock started you will probably be best off replacing the whole short block. The heads might be okay, but they should be rebuilt as well, and the cams will need to be inspected for scratches.
I would think $3,000-$4,000 should get it done, although without determining the cause of the failure there's no guarantee it won't just happen again.
I would look up the blue book value of the car, then subtract how much it will cost to fix, and not pay a dime over that..