I have a 2004 f-150 5.4 and showing P0340 and P0011 codes. is the P0011 code for solenoid and phaser ? sludge is also an issue and dealership recomends new motor. I also have transmission problem. overdrive feels like nuetral but turn off od and it shifts first thru third fine .

 

Welcome to the Forum!..I cant say anything about the cam phaser situation,as I have no experience in that area....concerning the "Sludge" issue,I would think you could invest in some "engine flush"...sludge remover,and run a couple of cans through it,and drain alot of it out the pan...
Concerning Overdrive acting as if it were in neutral,This could be something as simple to a plugged port in the Tranny Valve body,to a defective Torque converter lockout switch.O/D basically locks the converter to make a direct connection between the engine and tranny.Otherwise when NOT in O/D,its a fluid coupling.
Depending on miles on the truck,I just cant see anyone replacing an engine due to sludge. Personally I have pulled valve covers on some of the vehicles Ive restored,and "spooned" out the sludge buildup...Perhaps someone else will chime in on the Cam Phaser situation...

 

The way this post is written, little details on the truck, listing some of the most common issues with the 2004 5.4, I gotta say this post sounds trollish to me. Forgive me if I am wrong. I did have the transmission issue with my truck though, it is usually an E clip inside the transmission that breaks. I am not a tranny expert, more people know a lot more on this than I do. There is a good thread on it here somewhere.