To sum it up, the car clearly hasn't been very well prepared, but it basically amounts to:
(a) A tyre with a nail in it.
(b) A slight oil leak (if it cost £30 to fix at an Audi dealership it clearly wasn't the crankseal!).
(c) Dealer stated the car had previously had the cambelt changed, which it hadn't.
OK, so a pain, but not exactly the piston rings having gone so I think you need to keep it in perspective.
The problem with these "free" health checks is that they will always find something amongst a load of sucking in of teeth and "well, Sir, you could ignore it but if the car explodes and kills your Children" sort of way of presenting it so it is always difficult to judge exactly how bad anything is. I think the supplying dealer may well have a point here.
The tyre is obviously done and dusted, as is the oil leak, so what are you actually after? Does it even need a cambelt? If it is only 5 years old and hasn't done many miles why would one have been done?
I think you need to clarify in your mind exactly what you are after. Thus far it appears to have cost a tyre and £180 at an Audi dealership so your "financial loss & injury" appears to amount to that. With respect, it isn't exaclty a new clutch or engine.
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