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Let's not run in a circle here. I am not interested in the conclusion (interference or not) here as there are two opposing shools of thought. What am I am interested is how one arrive at making a particular conclusion. So far no one has made any convincing evidence to support his/her statement as to whether or not the engine is interference.
Whatever dealer told you that a broken timing belt causes damage to your engine is full of SH*T!!!!!! It does no harm to your engine, he just wanted to rip you off!!! My friend had a 90 LS- 400 with 265,000 miles on it and the belt went on him while he was driving. He had the car towed, belt replaced and he was good to go. It did no damage whatsoever to any valves, rods, pistons etc. He sold the car a yr later with 290,000. Those engines are awesome!!!!
I hesitate to offer my opinion as I am not an expert. I have had some personal experience with this topic though. At 128k my 1990 LS400's water pump locked up. It happened about a month ago. I've owned the car for less than a year so I can't vouch for the maintenance done before that time. Even with a totally locked water pump the timing belt did not break. The teeth of the belt were worn away completely, but it was still intact. The pulleys and tensioner were all damaged and had to be replaced. The engine was not damaged at all and runs as smooth and quiet as ever. The repair bill with the towing was about $1000.