advice on a4 prob not starting

My daughter's '98 A4 trans went out and the dealer replaced with used trans for $3900 and 1 year warrenty.
Next day, car wouldn't turn over/start in Park. Finally she discovered
it would start in Neutral. Sometimes it works in Park, sometimes it doesn't.
Audi dealer Shop #1 says it is the transmission range switch, has nothing to do with the transmission repair, and will cost another $800.
We consulted with an independant Euro car Shop #2 that says it's a neutral safety switch which is bolted TO the transmission and is therefore definately related to the transmission replacement. They said take it back to shop #1.
I'm interested in advice as whether it should be covered by the warrenty and if so, how I negotiate that with Shop #1. Screaming and saying I'm never buying another Audi from you didn't work ( :-), it wasn't quite that bad). Is there a process to work disputes with Audi?
We were seriously interested in Q7 and now concerned by this kind of customer service.
(ps they phone quoted us $400 to fix the cruise control which also didn't work after the trans. After we refused and went to get the car back, they said they fixed it as a courtesy, but charged us $48 diagnostic that they would refund towards the repair 'when we brought it back').
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Shop #1 = rogues.
get your trading standards involved.
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