When I saw the title of this thread, I felt physically sick. My 185 caught fire last July, and I'm still not completely over it so I totally feel for you. Standing there watching your car burn and being helpless to do anything about it is a horrible feeling.
I'm so sorry this happened, but glad you made it out safe.
Your car is salvageable, but the damage to the engine alone will be enough for insurance to total it. I don't think anyone will blame you for walking away -- fire rebuilds don't tend to be fun or cheap, and the cleanup alone can be daunting. Your car's actually in much better shape than mine was, but still looks like a big project. Was the fire confined to the engine bay? It's hard to see from the photos, but there appears to be damage to the glass. If the flames (or even just the heat) got through the firewall and into the dash, things get a lot worse real quickly.
Seconding what someone else mentioned...if they sprayed your car with the dry chemical stuff, get that cleaned off ASAP. It'll destroy a lot of parts that might otherwise be salvageable, and make things a lot worse for whoever decides to pick this up and rebuild it.
Really sorry to see this dude, and best of luck to you. She was a beautiful car.