When your mechanic used the magnet, he only proved they were non magnetic - therefore not iron or steel. They could be aluminum. This of course, does not make his diagnosis wrong. Today they make fiber optic scopes that are cheap - maybe you can borrow one (Milwaukee makes them, so do other tool manufacturers - for plumbers and electricians). Then you could pull the spark plugs and examine the top of the pistons. I'm not sure what you could see if you drained the oil and poked a scope up the oil drain hole.
By 'knocking noises' do you mean as if you are getting detonation - from low octane gas? And 'sounded like a Harley' - does his mean the exhaust bark or is there an engine noise peculiar to Harleys? If your engine seized, was there oil in the crankcase? Coolant in the radiator? Did it overheat (temp gauge on the dashboard)?
How are you w/ tools? This would have a bearing on whether you buy a used engine complete or maybe try to rebuild it using parts from an engine involved in a crash. For me, it would be a whole, working engine. While I've rebuilt a couple ofl basket cases and been wrenching around bikes and cars for much of my adult life, now I would rather ride than wrench.
Might you consider an FJR? Where Honda stopped upgrading the ST, Yamaha kept going on its big sport cruiser. I'd love to test ride that bike, or have a good excuse to do that, but my bike is too new (only 5 yrs old) and has low miles on it.
