Do you think I got screwed, or is it just part of the hobby?

that really sucks..... I think they needed to address the problem when you told them about the oil usage. Now there may be a bigger problem! I say pull it and let them figure out what went wrong.....At that point you can decide weather or not to let them re assemble it or if your going to do it yourself. Not much help huh? sorry...good luck and keep us posted!

Good point, but I don't think the oil consumption and rod knocking are necessarily related.
As far as the oil consumption, I would like to know more about it. What made them think it was the rings not seated, etc. What kind of finish did they put on the hone job? If it was a real smooth, glossy race finish, they may never seat, for the street.