They'll tear it down which should happen quickly. Then they'll almost likely put in a new shortblock which is already assembled. I highly doubt they'd try and rebuild. It's not worth it. The shortblock swap really doesn't take long either. Subaru had to do LOTS of shortblock swaps back in 2009 as part of a recall because of a bearing issue in the WRXs. Many were failing within 5K miles.
Unfortunately, you're not going to be getting a new car. It's not a lemon by definition.