Just read your whole thread and would like to say i'm gutted for you mate.
I would speak to a Official Seat garage and ask how many hours it would take to remove the cylinder head (most garages have fixed pricing based on x amount of hours required) even for massive jobs.
Speak to the garage and instruct them to remove the head for inspection this will be enough to determine if the engine is completely ruined or if its repairable, i would imagine 3-4 hours so expect a guidline of 350-500 quid.
The problem at the moment is you have no idea if its really knackered or not, could it be something like the injectors knackered and filled the cylinder with fuel and now its hydraulic'd.
OR..
Have the garage tried to turn the crank over backwards - i.e does it move at all before it reaches top dead centre of the affected piston.
I'm not too familiar with the modern diesels but is there anyway to take the inlet manifold off or injector out and get an endoscope to look into the cylinder.
Chin up mate even if the engine is knackered there are real bargains on ebay, there are companies that can supply and fit engines.
What engine code is it ?? there is a new engine for £2.5k for a dsg car.
Graham, I was thinkin about pointing the lad in your direction because you know your stuff!!