I took my 2004 TT with 225HP and 75000 miles into a reputable shop to get the timing belt, tensioner, water pump, etc. replaced per owners manual recommendations.
While I was waiting to get my car, the owner walked out to tell me all they needed to do was test drive the car. I saw the mechanic drive off and 5 minutes later walking back, getting a helper and then pushing my car back to the shop. A few minutes later the owner come out to tell me the new belt either broke or slipped, of course this was the first time in the ten years he has been in business that something like this has happened, and he would need to keep the car a few days to repair the engine. He said it probably bent some valves stems, messed up the head and a few other things I don't remember. What I'm wondering is: 1. What should I expect needs to be repaired or replaced. 2. Should I expect some compensation, I mean should I expect him to give me some kind of discount on the original repair quote? (Certainly not expect to pay for any of the damages his shop caused.)
I'm not sure how I should handle this.

They didn't break your timing belt, they broke your engine!   I would say they installed the belt wrong, forgot to tighten the tensioner bolt or some such thing.   Therefore when they test drove the car it malfunctioned and ruined your engine.
Depending on the shop behaves, I would think about talking to a lawyer about your rights as a consumer.  

sorry to hear about the damage to your engine.  if he is a reputable owner, and there doesn't sound like there is any reason to think this...

1. i'd be tempted to agree to what is going to occur from this point forward so there are no surprises.

2. personally, i'd expect the car to be fixed and i'd be prepared to pay the original bill.  but in addition i would expect a loaner car for the period of time the repairs take.  

3. i doubt you would be able to successfully argue for a reduction in the original bill.  imho. 

sorry to hear about the damage to your engine.  if he is a reputable owner, and there doesn't sound like there is any reason to think he is not.....

1. i'd be tempted to agree to what is going to occur from this point forward so there are no surprises.

2. personally, i'd expect the car to be fixed and i'd be prepared to pay the original bill.  but in addition i would expect a loaner car for the period of time the repairs take.  

3. i doubt you would be able to successfully argue for a reduction in the original bill.  imho. 

I probably should clarify my questions, the owner said he would repair the engine and provide documentation of the repair.

The first question is technical, when I read what work was actually done what should I expect to see.  Meaning, all or just some of the valves were replaced, heads were replaced or turned, any other parts replaced because of this issue?

The second is more of a financial, emotional question.

Thanks...