Can silicone sealant cause engine failure in Citroen 1.6HDi? ?

I purchased a replacement 1.6HDi Citroen Xzara Picasso engine. A mobile mechanic transferred all the ancillary parts from the previous engine onto it and fitted it to the vehicle. After less than 500 miles (having run it gently to 'run it in') the noise of big end/main bearings suddenly occured. The engine was extracted and sent back to Direct Engines UK Ltd (the supplier) with the turbo, cooling and fuel system in place for their inspection. They are now claiming that the cause of this catostrophic failure is silicone gasket particles used by my mechanic, blocking the oilways that supply underside of the pistons and the crank bearings. They said silicone should never ever be used on these engines but my mechanic (who admits to having used some silicone on this engine) claims he has used silicone to bolster rubber gaskets etc for the last 30 years with no problem. Are the engine company simply trying to avoid blame for a poorly assembled engine?