REALLY? BROKEN FLYWHEEL?

They should have inspected it while they had the transmission out but you should have told them it was cracked and all it would have cost you is the price of the part. The phrase "while you're in there" comes to mind. You will be lucky if they will split the bill 50/50 with you. Other than the fact that they didn't inspect the flywheel, they have no responsibility for a failed part with a quarter million miles on it. "It wasn't that way when I brought it in" doesn't work here because you knew it was broken. Get out your checkbook.