Here is my guess. Pothole or big bump caused oil pan to rupture. All the oil came out. You dove it without oil, end of story. As stated the block is above the cradle so it is unlikely that something from below broke the block.
The good news is that stock engines in Fieros can be changed by most backyard mechanics, enthusiasts and some repair shops. Start looking for a good running 4 or V6. If you are looking for a low mileage 2.8L V6 we have one here with I believe 79K miles. Its complete (less the harness) for $200.
" THE BLACK PARALYZER" -87GT 3800SC Series III engine, custom ZZP /Frozen Boost Intercooler setup, 3.4" Pulley, Northstar TB, LS1 MAF, 3" Spintech/Hedman Exhaust, Autolite 104's, MSD wires, Custom CAI, 4T65eHD w. custom axles, HP Tuners VCM Suite.
87GT - ALL OUT 3.4L Turbocharged engine, Garrett Hybrid Turbo, MSD ign., modified TH125H
" ON THE LOOSE WITHOUT THE JUICE "