Options (IMHO),
Assuming the dealership has been there a while, sueing them is something they've done before. And, they have a few pages of "lessons learned" that they will use to their benifit when it comes to a defense. They probably have an attorney on retainer and will be glad to excersize him/her to get their retainer fees put to use. And, ultimatly, they will keep you out of a car for quite some time doing this. The dealerships GM has 100s of cars he can jump into at the drop of a hat and cant understand why you're geting bent out of shape over just one little sports car he probably doesnt even like. This is the source of his lack of interest in making you happy. The bewilderment of the shop guys is probably due to your diplomacy shown by not going ballistic/postal at the whole situation. And, like the GM, they have probably fixed a lot of FUs and got away with them so though this one is exposed, it's just another FU to them.
Play their game against them. Talk $, not car. Tell them what you'll be out by fixing the car. They are supposed to be car value experts. The car was worth one number the day you drove it in and suddenly they threw half that value all over the shop floor. There isnt a reason in the world you should settle for a repaired car without a substantial compensation check. When they say "nobody will be able to tell it has ever been FUd", tell them YOU KNOW they FUd the car and have pictures to prove it. Why should you lose time spent on this, value of the car and have to go through all the aggrevation for something "nobody else will know about"?
If it were me at this point, I would get the two numbers most important right now.
What is your insurance company prepared to give you for the car assuming they are going to total it? Unfortunatly I totaled an '84 a year or so ago and had three or four rounds of negotiating until I got what I was satisfied with for the car.
What is the dealership prepared to give you as a top dollar trade for another car on their lot? Yes, I said their lot, but make sure it's clear you WILL be taking it to a reputable shop to be checked out with a "FINE TOOTH COMB" before accepting title to it. Then AFTER no less than 3 rounds of adjustment towards your favor, write it down in front of both of you. And, dont let them do the "I'll have to ask my manager.." crap. Make sure they recognize this is an exceptional situation that requires the damn manager sit right there with you. Then, add another number for; time lost/spent because of their lack of caution; aggrevation and stress due to their lack of intrest; and future effects of higher car insurance since whether or not the company is currently involved, if you should have an accident, it may be considered in getting the car repaired again.
If things get tough, the tough get going. Tell them that the number they are offering is making your arm feel numb. See if they're smart. If not, tell them next that this whole situation is making your chest feel like someone is sitting on it. By now an intelligent person would KNOW that they better make you happy or you'll call an ambulance to make the point clear. Clear point meaning that next would be a HUGE article in the paper about how a local car dealership gave a man what he THOUGHT was a heart attack due to their accident with his car
Dealership GM: "What the h... is the ambulance here for, another shop accident"?
Salesperson:" No,,,the guy that owns the car we wrecked had what may be a heart attack trying to negotiate a trade".
Dealership GM: "Oh S..t, (now thinking of the oppertunities he had to make you happy) tell him he doesnt have to go to the hospital, we have aspirin here. Tell him that will just raise his health insurance premiums."
Salesperson:"I quit,,,"
All joking aside; Weigh these two numbers against each other (insurance sum and dealership sum). Though I'm sure you probably had no intention of selling your ride before, there may be a small chance the dealership can offer you an acceptable number. By the time I got done with my insurance company, I got about top BB value for an '84 with almost 200K on it. Just a matter of being persistant and having the documentation to show the car was cared for. You have lots of leverage in this case. It's just a matter of getting way out on the end of the wrench and putting a good twist on their nut(s)
I'll watch the post
ad The more and more I think about this unfortunate occurence, the more it just ****es me off. This dealer and many other dealers/so called auto experts are just looking at us as just another car passing througn the day. And by the response of the individual you are dealing with, he is just looking for a quick fix so he can move on. They are surprised at your lack of cooperation????:eyerole If he was any kind of service minded individual, he would be treading lightly trying to solidify your needs in the best way possible. 
