Bad Cams?

This sounds like a perfect situation where a second opinion is in order. If the engine is not under warranty, I would recommend getting it out of the dealership. Have it towed out if necessary. Do a little research and find a shop with a good reputation. You can talk to the shop and explain the situation before taking it there.

Dealerships are up-sellers today. First to note that they are up-selling you is the Cams, it only has a singular one cam, not cams. It likely just needs a sensor or better connection, Get it to a local shop to have oil pressure tested with tester, and test that sensor. If the cams (upper engine) are worn enough to cause low oil pressure then just the cams can be replaced. But I do not believe this to be the case as main bearings (lower engine) will serve a greater roll in oil pressure. The result of low oil pressure wears out the cam (upper engine, not the other way around). If this is the case of low oil pressure being mechanical then you may can get by for a while with heavier oil like 15w-40 and/or high mileage too. Excessive clearances elsewhere in the engine can also reduce oil pressure but this usually due to lower/bottom end worn and low oil pressure was causing the upper to get worn faster and looses even more oil pressure Did you keep the oil changed as the manual says too. This includes wear in the lifter bores, excessive clearances between the camshaft journals and cam bearings, and excessive end play in the cam. The dealers bread & butter is the shop in back, never be fooled of that fact. Even if you need a engine the highest priced place in town to get that done is the dealership unless its under warranty or recalled.

Let me give an example that you can relate too. For Sale needs engine: Owner of car says needs engine, does not want to replace it, wants to sale to buy another car. I see the listing (being a mechanic that looks for good deals I respond, the sellers says it still runs & drives, I ask why then does it need a engine, seller says low oil pressure. I then think to myself, possible reasons why, Oil sender bad, oil pressure sensor bad or bad connection to it or Oil pump or issue with oil caking up engine from being over filled and/or ran hot or worn out engine and can I get it cheap enough to replace it if it does indeed need an engine. I go look at it it cranks first try no noise, no smoking, has clean oil, I suspect the engine is fine and the computer set a code for one of the other reasons other than a bad engine, even a possible bad computer module. I then tell the seller this to find out if they would rather investigate this or not and if not I buy it if price is in my favour and before replacing anything I test to be sure, even if I have to spend days testing. I do not go on just the code set and assume its a worn out engine because I want to fix the issue with this engine as its in my favour/money to do so instead of the dealers favour/money is in replacing it as their favour/money is greater.

Have an independent shop check it out.

Yup, I'd get a second opinion. The dealer may be correct though as the LS engines have had some camshaft issues for many years. There also have been oil pressure issues. How many miles on your vehicle?