The news sucks but, I don't believe it needs to be that bad. I restored mine (Midget) for considerably less - though admittedly it sounds like it was in better shape.
The mechanicals you can do. Especially with the help of this forum. These cars are super easy and you can easily refresh the engine even if it isn't a full rebuild.
The body work is a little more difficult but, even there there are options.
1. a local college
2. a local prison
3. a retired body man (my car work got done though a retired guy who has a small double garage - $40 per hour)
4. an apprentice moonlighting.
there are choices.
ask around, there are many more economical options. Of course if you can find a good solid shell so much the better. But, don't be discouraged we can find a solution.