Botched SKS key programming broke original SKS key... HELP please

I went to a nearby dealer to have two used smart keys bought off ebay programmed to my car.

I made sure that they were both "silver logo" on the back and that they were keys that should cross reference with my 2004 (the two keys are from a 2007 model).

Here is my understanding so far of how Smart Keys work but I could use more knowledge before I go back in to try to fix it.

From what I think I understand, they don't program the key to the car, they program the car to the key... nothing changes on the key settings they just tell the car to recognize the signal from the SK to be one of its own. Am I correct in my understanding of this?

It took them 2 hours to "attempt" to program my two new keys to the car. At the end of this two hours I was informed. "Your original smart key does not work so we were unable to get the two used keys programmed to work with your car".

I said wait you are telling me my original smart key doesn't work????

Answer: Yes.

I informed them that I've had the car a couple of years and YES THE ORIGIANL SK DOES work.

After a while of this back and forth, he said "well your original smart key doesn't work, as a smart key, now".

To add insult to injury they charged me $96 for the botched attempt to add the two used keys and told me that I would have to buy a "brand new" OEM smart key from them for around $300, as my only option to get the SKS system to work on my car again correctly.

So in summary it is going to cost me $400 just to get my car BACK to where it was before the touched it.

I was running very late for work since it took over an extra hour than what they estimated it would take, so I paid the $96 and left.

The next day I contacted the highest person I could with the Toyota franchise and raised hell.

They have agreed to have a different service tech look at the car and try to fix it.

I have told them that if they can "just get my car back to where it was before I visited them, they can keep the $96" since I always understood there was a chance they couldn't get the used SK's programmed, but no one ever told me that they might break my original key attempting to add the two other keys.

I just want my car to work with at least one smart key again.

Has anyone else had an experience like this?

Are they just trying to screw me and botched the installation of the two used keys on purpose to force me to buy a "new" key from them?

What other info should I know and is my basic understanding of how the SKS system works, correct?

So sorry for the long post but I wanted to make sure to include as much info as possible so that someone might be able to help/educate me before I go back in to have them work on it again.

Thanks,
Paul