If bought as is you may be out of luck. Call the CA Attorney General's Office and see if they can steer you in the right direction. You may have a claim against the company that prepared the inspection report, since they clearly did not find the obvious problem.
The AVVO response or other communication by Caruso Law Offices does not create an attorney-client relationship. Please call us at 505-883-5000 for a FREE CONSULTATION with an attorney. We look forward to discussing your case in more detail.
AS IS is a red flag, but you have to show the dealer knew the engine was about to fail but did not tell you about it. This type of fraud is call concealment. You know now what you should have done before buying the car. I hope you got the car for a low price. Caveat emptor.
Depending on what the AD said, what the dealer said and frankly, your inspection report (which could easily be seen at law as a written warranty) you may indeed have some recourse. Feel free to get those documents and all sales and repair documents to my office for a no fee consultation. We handle matters like this statewide.