Need both engine AND transmission replacement?!

2008 Prius, perfect maintenance, 115K miles went into limp home mode, kicked POA92 code. First we were told 12v battery was dead and needed replacement (did that), then that the transmission needed to be replaced, and finally that the engine also needs to be replaced. It's also reporting code P3191, POAOF, P0102, P0113, P0351-354, P0102, B1400, B1421, C1259, C1310. The mechanic said he cleaned oil from intake manifold but he says this damaged engine. He showed me compression numbers for cylinder; I can't remember exact numbers but they were lower but not terrible. They are recommending we replace both the engine and the transmission. It's hard to believe there could just be a catastrophic failure. Maintenance entire life of vehicle is exceptional and the car was not using oil, gas mileage was phenomenal, no indications of transmission issues before all this started. So, 2 questions: 1) Is it possible that I really need both an engine and a transmission and 2) if car is in good shape otherwise, is it worth it to put $5500 into a 2008 Prius (for used parts + labor $109/hr)?

 

$5500 includes used engine and transaxle. Certified Toyota mechanic and mom & pop shop.

 

When you start it, there is noise - not as before the problems when the engine started and it was silent.

 

Other threat is older - first diagnosis by Toyota dealer was transmission with replacement quoted as $5200. So, we had it towed to another shop with a certified Toyota mechanic. He seems to know what he is talking about, and spent a lot of time with us. He is the one that said the engine is damaged in addition to the transmission issues. Oil in manifold and compression not great, not terrible.