Car half repaired, now unusable?

Hi, I have some serious issue regarding the way my car repair was handled by a garage. my car was overheating because the coolant was mixed with oil so I took it to the garage, they quoted the repair cost to be somewhere between �700 and �1200 depending on the damage initially and I told them to go ahead and then they took one and half week to replace the head gasket, skimming etc and now they say that there are more serious problems associated with the car and possible engine damage. if the engine is damaged, the car is basically worthless. they are still doing the inspection and yet to tell me what else is damaged and whether it is possible to repair or not. now I am totally clueless as to what I can do, because if they could tell this to me in advance with a proper diagnostic check without doing any repairs, then I wouldn't have gone for repair at all and probably sell it off as it was for whatever price. I also have a warranty on this car and they agreed to pay for head gasket, but now the problem turned out to be more serious, not just head gasket alone. Please let me know if it is right for the garage to do some repair and then tell me that the damage is much more than initially estimated? can't this be found with a diagnostic checks? Please help me. this issue has caused me lot of stress because of the way the garage handled this whole thing. I am having sleepless nights. they were never responsive, I always had to call them myself, they never called me to give any update and were rude in answering my questions etc.