1. Is the shop a legitimate business? (Registered repair shop or 3 guys working out of a garage). 2. Do you have any documentation stating the work to be done for a certain price?
It's sad to say but what your describing sounds like a con that is all too common for military personnel. Unscrupulous business owners (con-artists) think because your in the military and that you will not be there (Georgia) forever, you make an easy mark. The game is get your money up front and delay, delay, delay then lie, lie, lie until you deploy or change duty station.
I'm not an expert, rather a former Marine that has seen this con go down a time or five. If I was to suggest a course of action I would recommend you collect any and all documentation that you have. Write yourself a story (type-it-out) as to your interactions with this buisness starting with day one an ending with today. Finally I would go see base legal and tell them your issue, they will not be able to help rather they will point you in the direction of a good (trustworthy) local attorney that can help you. Nine out of ten times when an attorney calls a shop that is defrauding a service member they get the message and make good. As for your case, I would ask for your money back less "documented" labor and parts. I'm willing to bet he has not ordered a single thing, therefore he will have no labor other than teardown. This guy has shown you that you DO NOT want him building your engine. Good luck man and I truly hope this is not the case however it reads rather suspicious from things you have said.
I would not have your Dad and his friends help, direct confrontation will lead to further issues... Besides solider, handle yours... you know better than most there is a time to fight and a time to use your brain judo and tap this MF out.