I have a bmw 2001 740i with timing chain issues. The chain started to rattle when the guide broke. ?

yes he could be right , depends on how much damage was done ..on some cars a broken guide cant be fixed .

No.  The timing chain guide is also the tensioner so it stops the rattling of the timing chain. That is all that SHOULD HAVE HAPPENED.  When it would not turn over, that says something else.  A piston is contacting an open valve. Metal on metal. Something else happened for it to run out of Exact timing.  If you don't trust mechanic take it to another shop for a second evaluation.  Tow it. Just say "I can't afford another engine right now so am going to park it at home"  Tow it to a better garage, even BMW or VW "A mechanic is a mechanic and to him a car is a car.

The valves are bent and you have debris that circulated throughout the motor. A low mileage used motor is  the way to go if you think the car is worth saving. 

A 20 year old Bimmer.  Cut your losses and send your car to the junkyard BEFORE you lose all your savings.

When a mechanic tells you that you need a new engine (and there isn't a visible hole in the block or head...) = time to get a 2nd opinion before doing anything.  The 1st mechanic may be correct, in which case you might lose $100 getting a 2nd opinion, but if the 1st mechanic is wrong and the engine can be saved instead of replaced (or if the car doesn't need to be junked), that 2nd opinion could save you $1000s.

It could be right but until he pulls  the heads there is no way to know - I had a belt release on an old honda once - most of the valves touched the pistons and bent a little - replaced valves, seals, lapped in the valves and put it back together in the garage - (about 150 in parts in the late 80s). No problems there after.

Thanks for your help guys

It sounds right to me.  It may be time to junk a 20 year old car.

Sounds legit. If the timing chain breaks, it causes massive internal damage to the engine. If you are a skilled mechanic, you might rebuild the unit, other wise you want a reconditionmed unit - BE CAREFUL!!!!!!! {[caveat emptor!]  My BIL had a 540 [same engine?] and had the same trouble - ended up scrapping the car.

So sad.

I don't know how you know the guide broke without taking it apart. But I do know if the guide broke it destroyed the engine and you need it rebuilt or another engine.