What a difference a couple of hours make! Things are significantly better than what I thought was the "best case".
The pump had simply burned out from old age, but the reason they couldn't lift it out was not because of a cave-in. A camera revealed that, years ago, someone had dropped the rope that was supposed to support the weight of the pump, and 250' of rope was balled up on top of it, jamming it in the hole. While I went off to get my face fried (HNT), the crew spent the afternoon MacGyvering a rig to fish the rope out and free the pump.
So everything is now out of the hole. Tomorrow, they will install brand new everything: pump, pipe, cable, ROPE!!! It will cost a bit, but a tiny fraction of what a new well would have cost.
This might not be squee-worthy, but it certainly deserves a WOO-HOO!!