Vauxhall Vivaro 2003 1.9 DTI water in fuel issue & dealership 'gives up'?

We bought this van privately when it was 2 years old. We checked with Vauxhall who confirmed it had full vauxhall service history & no record of any work other than services. It has only been touched by vauxhall since. The cambelt failed twice causing unspecified engine damage. Vauxhall fixed this both times under warranty. In January the water in fuel indicator light came on. It was towed to a Vauxhall dealership. They replaced the injection pump, distribution pipe, pipe backflow, return pipe, filter element, gasket and seal rings. It cost us £1253.40. Van returned to us at end of Feb. At end of May same light came on. RAC confirmed water in fuel & towed to same vauxhall dealership. They have tried replacing the parts they fitted but it doesn't work. We have involved Vauxhall Customer Care who got an engineer out. They now say the issue is the engine cylinders & it needs a full new engine. This just doesn't seem right on a van this old - it was registered in September 2003 and only has 103k on the clock (verified). They don't want to fix it & have recommended scrapping it. Of course they also don't want to pay us any money back either. This is putting me (sole trader) out of business. Can you help?

DLB
June 2009