First off, I'm a mechanic, and I own my own shop. That said, I may be slightly biased.
I don't think that the shop is responsible for repairing your vehicle.
Given the fact that it had to sit overnight(within two days) to show visible sign's of leakage, it must have been a very slow leak. This type of leak is hard to diagnose. Especially when the water pump was leaking. When you pressure test a cooling system, you have to fix the problems as they make themselves apparent. The system will not hold pressure long enough with a leaking water pump to show a slower leak somewhere else. However, any good mechanic would double check the system after the water pump was installed and could have found the problem then, mabe. Small leaks are hard to find at times and not always easily visible. Especially if the engine has to heat cycle for the leak to occur.
I completely understand your frustration over having to make return trips to the shop, phone calls, and such. Keep in mind that the mechanic that worked on your Suburban didn't want it to come back any more than you did. It looks bad on him and the shop.
So to answer your question, "how would I handle this", I'd have to say, thank your lucky stars you have the extended warranty and pay the man. It cost you $320 for a $1000 dollar job. Even though you had to go back and all that, that's still a better deal than most people could ever get.
BTW, I own a '98 Chevy truck, I've put two water pumps on it and replaced the intake manifold gasket. Both of which are typical problems on those trucks. If you keep it long enough, you'll be doing it again. It's the nature of the beast.
One last thing, a new water pump with gasket is around $50 from AutoZone, add $20 worth of coolant to that , a $20 dollar manual, and an afternoon of tinkering, and you could have done it for under $120. There's a grand total of around 20 nuts and bolts to remove, the belt, and some gasket scraping. That's it. You need a 1/2" wrench, 3/8"rachet, and three sockets (10mm,1/2",9/16") to do the whole thing. And mabe a little friendly help from DRN! :cool:
Feel free to PM me with any vehicle related questions. I'm always happy to help a rider. YZ165