Phone not repairable under warranty with three hutchinson. Anyone been through this?

Please bear with me while I quickly outline the situation.

I have a Sony Ericsson Experia X8 Android phone. When i recieved it six months ago i had a problem. Everytime I put it on charge it would take a while to register that its meant to be charging. Sometimes I would have to switch the phone off and the issue would be resolved.

Two months down the line I mentioned this in a phone call to a three advisor. They advised me to get it checked at a local three store. I did not act upon this advice as I have not had good experiences at three stores.

Recently the issue seems to have worsened. Therefore I booked it in for repair with three.

Upon receipt of the handset they emailed me saying the phone was not repairable under warranty as it had been physically damaged. When asked what the damage was they said the charging port was cracked. Maybe I had inserted a tool into it. As far as im concerned the only 'tool' i have inserted into there is my charger!!!

I refuse to accept liability for the damage as i am adamant that the issue was there from day one but has just worsened over time. The reason why i did not send it in upon discovery of the problem is i thought nothing of it. Also the fact that their advise 'switch the phone off to get it back up and running' seemed to do the job!

As far as they are concerned I have three choices.

1. Buy a new phone from them (As I have now become used to Android its not going to be cheap!!)

2. Get it repaired at a cost so high I might aswell buy a new phone.

3. Get it sent back to me with an admin charge of £19.99

I am not paying a single penny!

I have opened up a complaints case about this and really need some advice.

What can I expect from them? I KNOW I am in the right here.