Yes you have to give him the opertunity to make things right....I do beleive that he told you he would come and listen to it..BUT...do you have that in a form of an email or some other form of it being in writing?...or was it just word of mouth...if it was word of mouth then its your word against his..does this engine builder live far from you?....can you take him the motor and drop it off for him to inspect?...The court will tell you that you should have sent him back the engine as soon as you found that there might be a problem with the engine.
All engine builders will tell you that warranty starts at there front door...not yours....Sorry but this is the law...its not to fare but thats just the way it is.