Oil ran out, engine damage?

First off, I'm ashamed to even be posting this, because I know that I should be checking and topping up on oil and instead let that slip, so now I get to pay for being lazy...

We drove last night 200km up into the mountains here, stopped once on the way to eat. Didn't have any problems while driving here. Parked outside, temperature got down to -20C, tried to crank this morning to no avail. The battery is a week old. Someone driving by had a tractor battery, so I cranked from that several more times. The glow plug light was staying on for 10 seconds or so, so I thought maybe I have bad glow plugs and that is why it didn't start last week when I got the new battery (someone in the village got it "pull started" after many attempts which I'm thinking didn't help then either). I spent the next two hours slowly heating the engine with progressively warmer water, tried to start, the glow plugs were only on for a second and the engine was turning over easily, so I proceeded to warm up the fuel filter and fuel pump thinking something was clogged or the solenoid bad.

All of that is to say that I tried starting a dozen times or so before reading online that diesel can sometimes gel up and suspecting the Diesel I bought last near to my house wasn't winterised for the weather here in the mountains, so I called then the garage to tow the car there to warm up. While I was poking around at different things, I noticed that the oil was at the bottom of the dipstick (not of the zone which shows oil level, but just a centimetre on the end of the stick). Obviously a bad thing.

The shop did a full oil change while they were letting the car heat up and got it started and running but said that it makes some funny/bad noise. I haven't heard it yet, just what my friend who called the shop told me, because that was at closing time for the shop that they called him, so I'll see tomorrow for sure.

The shops opinion is that the engine is damaged. I wouldn't be at all surprised... :-(

What I wonder is, if the oil level was low enough to damage the engine, then why didn't I have any problems driving it last night? I was getting normal fuel economy (3.8l/100km) and all without any sort of odd sounds, power problems, etc. But then, I understand that first some parts of the engine would get oil starved before others, so is it worth trying to repair, or should I just go for another engine? (A used engine can be had around here from a wrecked car for 400-600€ and the garage said it would be 200€ to replace).