Dropped valve? Options

[bongo monkey]

Hello everyone!

A few weeks ago I bought my first ever car, a 1972 1.7L Porsche 914. I decided to take it to a reputable shop to give the car the ol' once-over for problems. After being assured that the car was in drivable condition, I drove my 914 home. A mile from the driveway, I looked into the mirror to find flames trailing from the engine compartment and the engine completely siezed up. Dismay! After pushing the 914 the rest of the way, I try to figure out what went wrong. The PO on my 914 put twin-throat 40 Weber IDF carbs on the engine, and the fire went through the 1/2 cylinder side and destroyed the air filter. Best I can figure it, one of the intake valves dropped and the spark got into the carbs and set the gas on fire. I haven't dropped the engine and cracked open the heads to have a looky-see yet, though. I'm still hanging on to the hope that I'm wrong, and I won't have to replace the piston and cylinder. From what I can see, the engine is still in 1 piece. Am I screwed? So much for that legendary VW reliablity.