I'd sure the "muffler bearing" comment was a joke...
Can you go to other dealers or are you somehow obligated to stick with the dealer you purchased the car from? I'd think a compression and leak down test would be the first things the dealer would do (after a visual inspection of course). To not do these 2 tests would appear to me that the dealer is NOT trying to determine the cause of your oil consumption. Read that warranty. Document EVERYTHING. Get copies of any work orders and the finding of the tech.
If you can't get this fixed, I'd contact legal counsel. Having notes/dates/documentation if everything will help your case. That is, assuming there's no weird UK law that prevents it.
Good luck, and keep everyone updated!