That sounds like what the mechanic was trying to tell me but obviously I
don't understand enough about it to explain it correctly.  (gee, I feel
dumber than usual today).  The previous owners have used this guy (the only
VW mechanic around) the past few years without any problems.

Thinking back about reading the original paperwork that came with the van, it
was built in 10/86 and I'm pretty sure did list a 1.9L.  Since the
paperwork's in the glovebox and not here I can't check.

<Although 'warp' may not be the correct word, what is being referred to is
the way certain parts 'face' each other after long term wear and tear.
Since the engine case is made up of at least three main pieces, and
connected to it are cylinders of a different material (steel), upon which
heads are bolted (again, of a different material) there are certain ravages
that occur over time, just because of the way the different materials cool
after use, and different pieces cool at different rates.

Some after market heads are not 100% aluminum (nothing really is I guess),
and of questionable quality in manufacture; you might find that -after
extended use at maximum temp- they will lose their 'face'. This can lead to
all kinds of problems. Of course, they may be twisted to begin with too.

While we may be talking about only a few thousands of an inch, it takes a
machine shop with specialized tools to 'resurface' a head. This refers to
the point where the head comes into contact with the mating surface of the
cylinder.
Between the cylinder and the case are a series of copper gaskets that butt
right up against the case, the cylinder pressing down upon them. The cases
themselves can, under the correct set of conditions, change their 'face'
along the line bore, or longitudinal axis. This can be especially telling
when you try to seat your crank or affix a main seal.

An average schmo, or even jaded mechanic, cannot tell from looking at the
outside of an engine these (often) microscopic differences are there. What
the wizened old mechanic can do is look at the symptom and hypothesize the
condition exists.
To say, carte blanche, an engine is "warped" and you need a complete
replacement may be more indicative of a mechanics' business acumen than of
an accurate diagnosis. At the same time, the same mechanic may have been
down that road of doing the proper repair, and having it cost as much as an
R & R. >