1998 Mercury Tracer Questionable Service?

Had my son’s car towed to the shop on Friday because it stalled on him twice. On his check up sheet in August 2010, the only thing needing attention was his serpentine belt; everything else was green.

After they checked the vehicle, they reported that the timing belt needed to be changed. Some other things they noted was the front brakes and the rotors needed to be changed, transmission flushed, new spark plugs. Is it possible for all this to go wrong in the space of two months?

1998 Mercury Tracer, 4 cylinder automatic

I have a 1996 Honda Civic LX. It has 170000 miles and it is in excellent conditions. Questions:

1. What is the best mileage for a time belt change? (Last change was at 90K, as scheduled)
2. What is the most cost effective approach for this change? (Honda dealer; independent mechanic or try to do it myself)
3.   It shows a slight knocking of valves when cold, even using mid octane gas. Is this related to the timing belt? Should it be addressed at the same time? sooner?

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