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HOLY SH1T SNACKS!! That is awful OP I'm sorry to hear your bad news. As said many times in here try to talk to a lawyer and tell the dealership you are talking to one. That should snap them into shape pretty quick. They know that they screwed up and like a stealership will always do, they will try to get out of having to spend or lose money anyway they can, it's what they're trained to do.
Also they can't put a time limit on this, who are they to tell you that you have to take back a vehicle that they screwed up if you dont follow their rules? Sounds like they are afraid and are hoping you'll take a loss under pressure.
They owe you a new engine. No other way about it. AND something in compensation for causing a huge headache for you that is wasting your time and keeping you from your property.
Trans oil has specific additives to work with certain materials and it could easily eat away at your block half sealant, headgaskets and who knows what else. Take nothing less than a new engine!
Fingers crossed for you buddy, and all the best of luck
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