1992 Buick Regal HELP! Oil leak causing cars end?

Engine problem
1992 Buick Regal Engine Size unknown Wheel Drive Type unknown Automatic 135000 miles

Today we were driving the car on the highway and it didn't feel right. It said we were driving the regular speed limit but it felt much lower.

Before today we have had very few problems with this used vechicle and purchased it for fairly cheap. Anyway, as we were driving the highway the car started to make a clicking noise. We pulled off the road and turned off the car. We could smell an unusual smell. What could best be described as burning rubber.

We were aware when we purchased the car and had a recent inspection that the car had an oil leak. He have been less then responsible when it came to checking the oil and making sure it was filled.
This is the only thing we could think of when we experienced the incident on the highway.

We decided to fill up the oil as it was very low and proceeded to start the car up and it would not start!

The tow truck came and said our battery was dead and attempted to give us a boost. The battery was not dead before and the car was not running long to cause the battery to drain?
Anyway, he tried to give us a boost and the car was SO close to starting but just wouldn't catch!
The driver was not very friendly and was anxious to just tow and drop us somewhere rather then put more time into helping us.

Now we are new to a small town and the mechanics around here have bad reputations and help is limited. When the tow truck driver dropped us off he spoke with the man at the body shop privately (apparently they are friends) and the mechanic came outside took one QUICK look and said the car was toast.

Is this possible that the car is actually dead? Maybe I can't let go (haha) but it all seems very strange to me. They also want to keep the car. But said to fix it would be $3000 and we will need a new engine.

How is it that the battery just gave out and what was the smell?

PLEASE HELP!

Anyway, any feedback would be greatly appreciated!

Thank-you for your time!