Darin, you can borrow my chipper anytime.
I got to tell you to demand a new motor, not a rebuild.
I bought a leftover 1990 Morbark 290 brand new in '91 it had a 80 HP (or so) Hercules Diesel in it. At 20 hrs it blew up, the dealer BS'd me into rebuilding it, it blew up at 50 hrs. Same thing, a crankshaft failure.
They wanted to rebuild it again, I said no. They said they could not put in a new motor. I took the block to a machine shop and they confirmed what I had already thought, the main journals were out of whack.
Armed with the info, my dealer finally confessed that they knew the Hercules were a problem and Morbark had discontinued them. They said they were pressured by the manufacturer's rep to only fix the problem.
In very short order, my chipper showed up with a new Cummins on it, new sheet metal and all. They took an engine/PTO assembly off of a new chipper that was in stock.
Demand a new engine, you paid for a new chipper and you should have a new chipper.