UPDATE 6/2/03: Per a new phone message apparently the engine was found...
Posting this ad for a person that contact a fellow local VCCA region member. I later received a phone message. I will forward the phone number by request, just send me an email.

Restoration started, Engine out, fenders off, repaired. Hood, rear doors off. Good glass, bumpers, wheels, and tires. Washington State title. Please make offer.

I believe the car is in North Juanita. However, Kirland was also referenced on the phone message.
The owners are giving up on the project because they moved away to the east coast.