Lexus / Toyota The Toyota Motor Company Warranty declined for ES300 - car died at 68000 miles Torrance, California

This car - a Lexus ES 300 (2003)  has a warranty of 6 years / 70,000 miles on the drive train. Within the warranty period of this car, the engine oil lamp on its dashboard turned on. The car was still under warranty with less than 60,000 miles and under six years of usage from its first date of use being  2003. 

I took the car to Lexus  dealer for servicing and the dealer diagnosis was Checked - Oil Level is Good and turned the oil level light off. This has been evidenced in a dealers service document. The dealer failed to look at the relevant issues and apparently just checked the oil level and not why the oil level lamp was turned on. This eventually led to the cars engine failure about six months outside the warranty period. The car engine started to make a knocking sound and when I took it to the dealer and I was told that that the engine has been damaged likely due to oil problems. I have all records of regular oil changes and these are available as evidence.

After reporting this case to both the dealer as well as Lexus Customer Service in Torrance, CA and pleading for a month, I was turned down with a standard statement "After reviewing your records / service history, Lexus is declining warranty coverage". 

I am now looking a legal options - after all, I didnt pay a premium for this brand for such lousy warranty / customer service. So much for the "relentless pursuit of perfection" when the basics dont seem to be in place. 

Interestingly, I found that a class action was settled by Lexus due to such oil sludge problems for engines up to model year 2002. The problem is prevalent in model year 2003 as is evident from my case.