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

Besides the fact they obviously FUBAR'd the build, this is the other big problem I see:
So, I call them and tell them about the oil and he said to keep driving it and the rings should seal eventually. So I drove it all this spring and summer,
Now they have latitude to play all sorts of hogwash games with you and claim plausible deniability for whatever BS story they want to cook up. If that was my engine it would have been back in that shop at the first sign of trouble. Rings don't seat "eventually."

Good luck.