He sounds like a conman.
This is a case where an expert witness or two could help out.
His diagnosis is bogus and a competent mechanic on the stand should be able to point that out. Thing is, he probably knows it and that's why he is saying it was diagnosed elsewhere. He says he has witnesses to that effect and he probably does have a couple of friends who'll say so for him.
You could find a couple of witnesses of your own and make it a "his word against yours" deal. That could expose you to perjury though.
Better would be to show his diagnosis was maliciously wrong and expose his "witness" as a liar. If you were tricked into a contract you can fight it.
But you will have to sue for money. Just defending yourself won't pay for the legal bills. You need someone who will take a cut of the sttlement and then you go after the mechanic for about two to three hundred thousand dollars.
Those lawyers exist. If it's in your charater, play mean. Chances are he'll just not want to bother with the fight and go after another easy mark.
