Timing Chain advise

Hello all,

I would like some advice please, I have read and re-read pretty much everything that I can find on this, but being my car I am probably being a little bit bias and need some good clear advise if a tall possible.  To outline the situation:

Car:

1. 2011 Yeti 1.8TSI Elegance (technically out of warranty period)
2. Purchased with 39,000 miles from Main Dealer in mid 2016 as Approved Used.
3. Serviced at Main Dealer only, on time and had everything done as advised and required.
4. Car now has just 64,000 miles on it.

Problem: (Very Common it would appear)

1. Timing Chain has just stretched and jumped putting the valves into the one of the pistons.
2. Skoda will only advise a new engine, which I agree with.  Full cost inc. VAT fitted is £5300

Current Situation:

1. My current stance that I have conveyed to Skoda is that I am happy to pay the labour to fit the engine, but because this is clearly a documented and admitted design fault with these engines, I expect Skoda to pay for the actual part, in this case a new engine.  If this had simply been a normal low percentage part failure then I would accept I need to pay for this as it is luck of the draw so-to-speak.
2. Skoda for their part have offered a good will gesture, though this equates to £1700, leaving us with £3593.92 inc. VAT to pay.
3. Skoda have only issued the one offer, and have referred me to the ombudsmen immediately, rather than looking into the issue and being remotely reasonably with regard to even communications.
4. The dealer which the car is at now are pretty disgusted by the way we have been treated by Skoda customer services.
5. I am unhappy with Skoda's offer because there is absolutely nothing I could do to to have looked after the car any better, and I have paid a premium at all points along the way to ensure that Skoda Main Dealers were used every time.  This is a VAG design fault, not the usual S#!T happens situation in my view.
6. 65,000 miles on a part that has no service advise on it, and is meant to last the lifetime of the vehicle is in my opinion not even half way to a reasonable level of wear.
7. The Skoda dealer the car is with have told me that any engine problems (not just chain issues, any issues!) on similar age TSI that come in for goodwill or otherwise are stipulated by Skoda to have the timing chain done and replaced with the new design chain, otherwise they will not authorise the work to be done!

Your views please:

1. Is it right that I have to pay nearly the value of the car to get it fixed after just 25k of motoring, in effect I am looking at 60p per mile to run this car since my ownership, not taking into account any fuel, servicing, previous parts etc etc.  On a similar basis my 2010 Range Rover 5.0 supercharged autobiography is coming in at less than half of that cost!!
2. Am I being unreasonable in wanting a new engine paid for?
3. Should I accept the gesture?
4. Is there any point in going to the ombudsmen, I have heard that "goodwill gestures" disappear after you have escalated the case that far.

I hope this all makes sense, your opinions would be very gratefully received.

Kind Regards

Tim