According to the 2005 Official Towing Ratings publicshed by Motorhome Magazine, the Jeep Wrangler can be towed with both manual and automatic transmission with no restrictions listed? Other models, like the Suzuki XL-7 and other have footnotes indicating "1)Tow with transfer case in Neutral, transmission in 2nd gear"
Although this is not a gurantee that she was towing correctly, I would suggest getting the owner's manual out and looking at the recommendations. Also, get another opinion, there is too much information missing here??? "He looked at the car and said the engine was shot?" That's like looking at my chest and saying I need a heart transplant? There are too many service stations located next to really nice campgrounds that drive up and see an expensive rig and easy mark! I'm not saying this is the case, but I have seen it several times.
More info please...
How does he know it "WON'T" turn over? Other issues could be battery, starter, ignition module, about 100 "computer" related items, timing belt. Did he pull the oil pan, remove the radiator, fan, and water pump and manually turn the crankshaft to visually inspect the operation of each piston rod connected? The only way he could look at an engine and determine it needed a new engine was to visually see a piston rod protruding out the side of a cracked block! I doubt that happened.
Find someone in the campground that knows a little about engines...get another opinion. One more thing...you could probably buy an entire 2000 Jeep Wrangler for $6500! A new engine and drivetrain should not cost more than $3500?
I smell a rat?