Touchscreen dead zone on Z3, sony have refused repair under warranty

Hi there! First time poster here. I purchased my Z3 around 10 months ago. A month ago I noticed a dead spot in the touch screen and you couldn't press certain letters in portrait mode without hitting other keys. I sent it off and long story short, sony voided my warranty under physical damage. This damage is a 0.5mm gap in the "waterproof" seals on the phone. I escalated my claim, there were no other signs of damage so it wasn't me and was covered by the phone case since the purchase date. They sent it back and still refused.

Today when I received it, I switched it on and there was static on the screen (the setup was jumping all over like something off a horror film), it also has several new scratches all over it. I performed the touchscreen test on the service menu. I'm not sure how to post my pictures but it curiously is in the exact same position as another user posted here a year ago:


Now this touchscreen issue is obviously what was wrong before, and what Sony refuses to fix because of some "physical damage" not caused by me. What do you think I can do? Clearly this was a faulty handset with the touchscreen, but they don't acknowledge that. Also with the new damage since they sent it back to me. Surely I have some rights here? Is there any way to fix the touchscreen?

Many thanks in advance!

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