Car people: Is this mechanic lying to me?

I took my car in for a routine oil change. I’m not “past due” for an oil change either. No problems to report.

When the guys get done, I’m told that when they checked my oil, there was NO oil on the dipstick, NONE at all. They said I have an oil leak and that there was oil on the engine. They want me to pay for a $700 repair to replace a sealant.

I don’t understand it: I haven’t seen any fresh oil spots under my car (at least, ones that I have noticed), my oil light has NEVER gone off, and I haven’t been experiencing any engine knocks/loudness. They claimed my engine was running loudly…I don’t know what they are talking about. It didn’t sound loud to me.

I called my dealer (30 min away) and I’m going to have them take a look for free when I’m out that way, but what do you guys think?