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What engine do you have, 1.8t or a V6?
Was the engine running before? Maybe a little more history or back story would be helpful.

I personally can't believe any mechanic would want to replace a Crankshaft Position Sensor when all cylinders are at no compression, unless they are looking to steal your money.
Seeing as you have no compression this a mechanical issue.
A Crankshaft Position Sensor is electronic device which has zero effect or bearing on a strictly mechanical issue.
Checking of the timing marks would be my next bit of advice. It's my guess that something catastrophic has happened like the timing has somehow gotten way off and now all of the valves are bent.
 
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