I'm sorry to hear of your troubles, and a bit surprised to hear of your poor service experience.
While you mentioned buying the set new, do you know when it was actually made? sometimes dealers have old product sitting around a while. I bring this up because the first generation of the Thomas set with the remote uses a different sort of radio control that is not really the same thing as any other LionChief engine. I think these are the ones with the red remote. The newer Thomas engines that have the same style of remote as other LionChief products should work with the universal remote when it comes out. Edit: After looking at the parts diagram referenced below I realized the new thomas remotes still look different than the other Lionchief remotes, but internally they are the same. As such, the Universal remote should work just fine.
As to trying to fix the remote you have, there is very little in the way of serviceable parts in there for the average person. I do recall hearing that the battery contacts may be an issue on the original remotes, so you might try using a small screw driver to bend the contacts outward slightly to make sure they are making good contact with the batteries. You could also open up the remote and see if one of the wires broke off from the battery terminals or board, or maybe see if they have cold soldier joints.