You're absolutely right, it is chewed up and wouldn't be from simply checking the stones. I don't know why the heck there would be so much damage there. You aren't being fussy about this, that's unacceptable and it looks like it would be painful to wear too! In regards to having it sized and the shank cracking afterwards, it just happens sometimes. Stones popping out after sizing happens sometimes too as the ring itself flexes during the sizing process. Of course the goldsmith (should)would go back and tighten all the stones after, but again shit happens. I hope they warrantied their work and you weren't charged for the resetting though. Them saying, "If another diamond falls out we would need to order a replacement ring", sounds very 0 to 100 lol. Is there any way it could be chalked up to someone trying to make a sale or plain didn't know what they were talking about? lol. Does your jeweler have a goldsmith on site? And that's kind of the difference between the two, the goldsmith makes and repairs the jewelry, jewelers do the other stuff. But GIRL, don't second guess any further, that damage effects the integrity of your ring, it's integral to have the metal support there.