Engines are in the business of fire; they use it to make power, they contain its wrath and they channel excess energy away where it can do no harm. But in the same way that a badger on a chain is more useful and less dangerous than a school of sharks, allowing that blaze to leave the confines of the combustion chamber can cause serious problems for your engine's metal components and everything attached to them.
The Basic Problem
Pure iron liquefies at about 2,700 degrees Fahrenheit, and aluminum at around 1,200 degrees. The fuel in your engine's combustion chamber burns at somewhere between 2,500 and 3,800 degrees depending upon the engine; diesel engines can easily top those temperatures in some high-boost applications. Given that, it's fair to wonder how an engine survives at all, particularly considering the fact that most use aluminum pistons and cylinder heads. The reason that engines survive is that the actual surfaces never get that hot; heat penetrates the metal to a certain degree but quickly conducts through the metal to the cooling system.
The First Stages of Burn
Most engine fires happen because either the oil sludge around it ignites or because a fuel line bursts. In the open air, gasoline burns at about 500 degrees, oil and grease at around 700 and diesel at about 750 degrees. While burning oil or diesel can and will turn aluminum parts into a shiny puddle, it's what that fire does to your fittings and cooling system that ultimately destroys the engine. Once the fire melts the electrical wiring, the engine stalls and the cooling system stops. Next, the 700-degree oil fire burns through the fuel, power steering and transmission cooler lines, which adds even more liquid fuel to the blaze.
While additional fuel oil doesn't help, all Hades really breaks loose once the fire weakens and pops the hose clamps on your coolant hoses. The water inside the hoses will actually protect them to a certain degree, but the fire will soften the hoses and the thin aluminum and tin straps holding them to the block. Once coolant sprays out of the block, all coolant capacity in the cylinder heads goes away. At this point, the block, seals and everything metal inside the engine quickly reaches the temperature of the fire. Aluminum doesn't stand a chance, especially if there's adequate ventilation around the block and fire temperatures go up.
Heating any material up, particularly a crystalline material like iron, causes it to expand; cooling it causes the material to contract. You've probably heard that old bit of advice about not putting cold water into an overheating engine. That's because doing so will cause rapid, localized contraction in some places and rip the block apart from the inside out. The iron foundry that poured your engine block and heads used a giant furnace and multiple cooling stages to ensure that the whole block cooled at the same rate. And even then, the block required machining to ensure the proper tolerances afterward. While getting the block hot may not necessarily damage it, uneven cooling from 700-plus degrees will cause it to twist and warp.
Anyone with experience in welding or fabricating metal can tell you that a lot goes on with metal before it gets to its melting temperature. Tempering and annealing are ancient techniques that involve heating the metal up to a given temperature and either quickly cooling it to make it harder or slowly cooling it to anneal it. Iron will reach a temper point at well below 700 degrees, and getting it up to 700 degrees or more will permanently rearrange the material's atoms. How quickly or slowly you cool the metal will determine its hardness, which is the other major reason that foundries carefully control cooling rates. Uneven cooling rates in the engine will not only warp it but will cause variances in hardness that will certainly prove detrimental in the long run.
What You Can Do
If you lose all the coolant and the engine is worth salvaging, then you're almost certainly going to need to re-machine everything in it. This includes the main bores, cylinder bores, block and head decks, lifter bores, valve guides -- basically every point where the block touches something. Failure to do so will quickly destroy your engine's bearings and moving components after you put everything back together. At this point, you might be better off just buying a new engine. But if it is worth salvaging, you might seriously consider having it cryo-treated to not only restore even hardness, but actually improve it. Cryo-treating involves heating the engine block up to about 350 degrees, slowly cooling it to negative-350 with liquid nitrogen and repeating the cycle several times over several days. While pricey, cryo-treating will change the crystalline structure of your block from a standard Austentite to a super-strong Martensite. This process can make every part in your engine about 2.5 times stronger and longer-lasting.