i noticed those hammer marks in the first pics of you getting it back. that machine shop is obviously into doing shoddy work and charging too much for it. there are multiple routes you can go as far as retaliation. you should not let this go without doing anything because it will only mean someone else getting ripped off.
to me this is fraud, plain and simple. you expecting machining, you got sanding. you expected better than u gave it, came back worse. legally your route would be to take this block to a WELL KNOWN machine shop and get them to at least make an estimate, and most have them repair it and get full paperwork on inspection and repair and cost. then you would either
A. buddy up with a lawyer
B. pay one
and their first action of course would be to write a letter and let them know that you are actively pursuing litigation against him and his company for anything you can make stick including fraud, breach of contract, and malicious damage to property.
you can of course write this letter yourself, but it will carry more weight obviously with a law office's name all over it. this is where having a friend that is a lawyer is handy. If hes really a friend he will write this letter for free because it takes him two point five seconds to know exactly what to say to scare him into complying
either way, you should let him know that his only options are to pay to have another shop fix his shoddy work, or to go to court and possibly be charged with civil and possibly criminal charges. explain that he had the option to take care of this man to man, but that he lost that chance when he insulted his own customer and damaged your property on purpose. explain to him that you had a professional machinist look at it and tell you that it was deliberate damage not caused by machines but by hand.
your other route, is to ruin him. the BBB of course, but more importantly you want to destroy the business name and his name. The news is an excellent way to scare him into complying as well. let him know that you have no problem dedicating a large portion of your time to making sure he loses enough customers that he will have to close down shop. even if you dont have the time, make him believe that you do, and that if you have to you will go as so far as to park outside his business and picket anyone that comes to him for services. let him know you have found other ex customers that have experienced his "work" and are ready to join in with you going to the news to have him snubbed out. if you can make him believe that, it shouldnt be much of a leap to make him believe that you have a lawyer willing to try a class action lawsuit against him including former displeased customers.
(just read the BBB page)
wow so hes got that many complaints? was the one from the 21st you? or is someone else already pissed this year? with that many BBB complaints, it shouldnt be hard at all for a lawyer to take this, or hard to convince him youve got a number of pissed off people that are willing to take him out of business.
let him know that you know your rights and you arent afraid to go the extra mile to make him at the VERY LEAST refund your money. you dont have to do it, you just have to make him believe it.
hey have a bunch of your cute sounding chick friends call his business (or get his home phone!) and say they are investigative reporters calling from X news station (get all the main big ones) to get his comment on an upcoming news segment on service shops that rip off customers. this will help sell your willingness to cause damage. have your guy friends call after he hangs up on the chicks and pretend they are news editors calling again to make sure he was quoted correctly. hopefully he will cuss out one of the girls, and you just make sure and record all those calls and quote him exactly, but get one thing slightly wrong to make it sound funny like it could be a typo but he could have been stupid and said it. that will make him upset AND afraid that he would get bad press.
remember he has much more to lose than you. you have a messed up block, hes got a whole shop!
send him down the tubes mate