JAGUSMC

So I purchased a 2013 6 spd Accord coupe 3 months ago w/49,800 miles. Still has factory powertrain warranty. When I bought it from a non Honda dealer I took it to my local Honda dealer and had them inspect it. Everything came back good except a recall on the battery sensor. So last week it wouldn't go into reverse. Took it into the shop, they said it's a powertrain issue and not to worry because I have factory coverage, gave me a loaner and said they'd call me. They called me and said they looked up it's service records and saw that it had a clutch and flywheel replacement by the dealership that owned it prior. They said since they were replaced, it makes them think that the other dealership may have done something wrong and caused my current issue with the car not going into reverse. They said they wanted me to pay for the tear down of trannie so they can get in and look and if they didn't cause the issue then the warranty would cover all costs. I balked and said I wasn't interested in getting into a pissing match between dealerships finger pointing but eventually agreed, since I have all the service records that were reported prior to purchase and saw no issues or questionable related powertrain work. Once they tore it down they claim that the speed sensor was replaced and that the person left the old part inside the transmission (bolt and all) and that it got chewed up and eventually logged into the new speed sensor which caused the shifter to not engage in reverse and therefore all work would not be covered under the warranty. After reading the warranty again, the power train warranty coverage states that powertrain is covered for 5 years or 60,000, whichever comes first. Honda will repair or replace any part that is defective in material or workmanship under normal use. It goes onto say flywheel, timing gears, transmission/transaxel case and all internal parts, seals, gaskets, etc.

I've checked the exclusions and see none that would negate my warranty being honored. The dealership tried to tell me that all repairs must be done by Honda, I pointed out that his statement is his opinion and that the warranty doesn't say that and that the language is pretty clear. The warranty does allow for repairs performed at a non Honda facility should the owner feel it necessary and it doesn't negate the warranty based on work performed by non Honda. I told him I wanted to be clear that the dealership was not honoring the warranty despite it stating I was covered and they said yes they are not honoring it because the speed sensor was replaced and left in trannie which caused the issue and that even though it was prior to my ownership of the car, and there is no service record of this repair even thought all other repairs are listed and searchable, it wouldn't be covered.

My question is has anyone else experienced anything like this? Anyone familiar with Honda powertrain coverage? Thoughts? I plan on contacting Honda Automobile Customer Service later today.