"Last week I paid a small fortune to replace all of the brakes on my 1988 740 turbo wagon. Last night, the car started to shake and make a knocking sound. I
had it towed to my mechanic who said that the engine had thrown a rod and would have to be rebuilt for more money than I can spend. The car has only 140,000 miles on it and has been well maintained. Any ideas? Should I throw in the towel? I really like the car but can't see spending lots more money."

What was the extent of the brake work? If the system required a complete rebuild (calipers, pads, and rotors) at only 140K, either the vehicle was not as well maintained by the previous owner as you were lead to believe, or you are dealing with an unscrupulous mechanic. Replacing the pads and one set of rotors (usually the fronts wear out first) should not cost more than a few hundred at most. The parts are certainly inexpensive, and the labor should not be too great on a car where the front brake pads can be replaced with a screwdriver and one's hands (may be more involved on ABS equipped cars).

Thrown rod? I don't know much about the turbos, but there have been cases where the turbo has overboosted due a failure of turbo components (wastegate acutator?) and caused the engine to throw a rod. If you search in the archives, you can find a few recent posts about this.

An engine that has thrown a rod (i.e. penetration of the block) can not be repaired, that I know of. I suppose that you could remove the head and turbo and fit them to a new block. But a good used engine might be your best bet. If you don't want or can't afford to keep the vehicle, it will be worth a great deal more to prospective buyers as a runner than it will as parts car.