$200 for a wheel to match a wheel built around a Formula hub and a Jalco rim seems quite steep. I can easily get a pair of wheels for that price.

So I'm guessing whatever happened was bad enough to trash the hub. Not impossible, but a bit rare. W/o autopsy photos, it's impossible to tell whether the diagnosis is right or not.

Functionally speaking, you should be good with pretty much any 26" disc brake, screw mount rotor, MTB wheel.

If you're stubborn and patient enough, you could probably disassemble the wheel and lace a new hub in there. Right now, a net search for "formula disc front hub" came up with one place selling them for $13...

Make sure the spoke hole circle diameter is a match and you're all set. Plenty of wheelbuilding tutorials available online.