Interepreting Leak Down Test Results

I am looking for some help interpreting some leak down tests to see if I should push my dealer for a new engine or allow them to rebuild.

I have a '99 VW Passat 4 cylinder and around 68,000 miles it started consuming 1 qt of oil per 700 miles. The initial leak down tests were as follows:

#1 - 2%
#2 - 16 %
#3 - 1%
#4 - 5%

In December '03 the dealer decided to replace all the rings and honed the cylinders.

In April '04 the engine started consuming oil again at a rate of 1 qt per 500 miles. I took it to the dealer and they did another down test. Results are as follows:

#1 - 22%
#2 - 24%
#3 - 25%
#4 - 11%

The dealer would like to re-do the rings and based on the results it seems they have made my engine much worse. The good news is it is still under warranty. But I want a new engine as it seems that any fix they do at this point will make it worse than when I brought it in the first time.

Do I have a legitimate gripe to push for a new engine??

I doubt they will just replace it with a new short block unless you can show they did something wrong. If they're going to cover going back in it I'd let them tear it down & see if it broke the rings or something. I'd make sure to see the thing when it's apart & see if the cylinder walls are badly scored, it shouldn't be worn out with that mileage. If it broke rings & scored the cylinders then you might have a case for them to pay for a new short block.