I agree with Eddie on the 2 hour timeline if "all" that was done was remove cranks and pistons from rods with no cleanup, cam/cam bearing removal or measure clearances of parts or blocks.

That's why we bring our boats (and engines) to you, Brian.

While I agree with the last thing that Mike said I don't think he should pay the $400. However,I don't think you will get them back without paying something, I would try to knock it in half, to say, $200. I think that is a fair number. I would be so embarrassed that I wouldn't even think about charging you. It's a small price to pay as a business owner.

I realize that some jobs and customers can be a pain. He knew that you wanted to take your time and supply some of the parts. If he wasn't ok with it, then he shouldn't have taken them in. I have turned down numerous jobs because, for one reason or another, I wasn't comfortable with everything. And that's ok. As a business owner, you have that right. They wouldn't have been there that long if they would have been torn down in a timely manner.

Try to make the best deal you can to get your stuff back. Don't leave it there or let him talk you into doing the job. That would probably not end well. I have a pretty good idea of who it is. It will work itself out in the end. I understand that it's more about principal then the money. Get the best deal you can and walk away.
Eddie

Is your builder very busy? If so then he must have some kind of skills and may have been waiting to hear from you.You did mention you were sent to him so somebody likes his work. Are you close enough to have stopped by sooner to check on progress? Was there communication between you and your builder during the 3 months? Shame on the builder if all you say is true but I would sure like to hear his side.

Without reading all the posts. Did they sonic test the blocks?

Brian brought up a good point. I know there are always 3 sides to a story. My comments are based upon what the OP has stated. If that is indeed fact, then it is what it is. I agree in wanting the hear the other side as well, if it differs from the above.
Eddie

i feel bad for ya. i have a great engine builder that many of my customers have used. he is a little on the slow side but does incredible work. he is realistically priced too. i dropped one of my motors off in end of sept. told him in not in a hurry. just got my estimate last week. told him to get going on it and i need it by april 1st. lol. call the cops and have them go with you to go get your parts. unless he has a signed work order from you with an agreed estimate he doesnt have a leg to stand on. good luck!

As said before the fact remains "possesion is 9/10ths of the law".
Pay the man and walk away.

I learned the hard way as well..........I had a blown transmission. guy tells me he can fix it for $1,200 bucks. I find a good tranny for 500 bucks which I paid for, and had him swap it out, and he takes the damn thing apart when I had a warrenty on it from where I bought it! It took him three years to put by boat back together and the bill was now 12000 dollars.
Yes I said TWELVE THOUSAND dollars as he charged me for 3 years of storage.
The entire three years I kept calling him and even showed up with a truck numerous times to get my boat back unfinished, but he would not release it to me nor would he tell me where it was. He had a storage yard somewhere else?
I went to the bank and got a short term loan and got my boat back.
When he delivered it, it was filthy and had moss growing on my white upholstery, an oil spill in the middle of my carpet on the floor and musty inside the cuddy. There were leaves all over the inside of the boat and it looked like death warmed over!
At least I got my boat back. I will never deal with this guy ever again!

Last note...when I took him the boat my tabs worked. When I got it back they did not. I found the problem myself and got them working again.

I am pretty sure I figured out the builder now and he was so slow after recieving half down on my friends $45000 build. Yes his work is good but takes him forever.

Why would you have pissed him off? Asking for an update and timeline for the work? If that's his reaction, then pay the $400, then post the shop in the beware section so the community knows to avoid him.

When my customers ask questions, I answer them. Best practice is to communicate so they don't ask the questions in the first place, it's not a hard concept...just basic business if you want more of it.