Finally, my darling Pajero is almost 100% back in form now. @shadow79 and Jalil installed this new engine three weeks back and the car started in the first crank. Kudos to Jalil's, great workmanship and attention to the detail - pretty impressive mechanic. Thanks, Saleem for all the support and speedy assistance. Thanks, @Barry for all the time and support.
So far I have tested this new engine on two off-road drives and I'm pretty happy with the performance so far. On the first drive I didn't push much, to gauge the engine response and heating issue (if any), but on last Friday I tested this engine at iftar bowl hill climb and the car went up from left and right side in one attempt in HI gear.
Last night I put the REDEX double dose of fuel system cleaner and drove to Abu Dhabi, that smoothen up the idle and also bumped the fuel efficiency and clear up the exhaust smell, so hoping to see some better throttle response in next drive.
After we started the engine, we have opened the old engine and found the culprit but still, the mystery remains unclear as of why oil supply was insufficient to fry that metal.