Engine Tapping

Once again my '01 300m is giving me problems. I recently went for atrip to the Grand Canyon and started noticing a tapping noise in the engine. I had never heard it before. That was about 2 months ago and since the noise has benn present. It sounds worst when the engine is cold, then you hear the sound when the engine revs. I took it to a mechanic and he said it is the camshaft. I know this a costly job. He said I should just replace the whole engine while I'm at it. We're talking $3000, $4000, that's way too much money. Do you guys have any advice? Do you think it could be the camshaft, or something else? Any info is greatly appreciated.

Thanks