He said that this was just judging by the look of it. He said it would cost me about $400 to remove the engine then it would cost me 2k-4k for the rebuild and the labor.

If it was me I would rebuild the engine since it is open then you are good for many year´s if it is done well. I know that people with the 4,7 and the 5,9 have gotten 300k+ miles out of their engine´s with out a rebuild but that is with a very good maintenance.

head gaskets are known for going in the newer dodge engines id just replace the gasket if all else is good