Just read the full thread (and looked at the pictures in the attached thread) and I have to say I would not buy anything from H&S on the balance of the evidence here, and I suspect that most other people who have not dealt with them before will take the same view. How many of the comments on here supporting H&S are from people who have had prior dealings with them.
In the end, H&S sent what any reasonable person would view as a faulty part (and the pedants on here who insist it wasn't "faulty" are showing their bias), the OP has pretty convincing photographic proof it was faulty and has made a good faith attempt to return it. As far as I can see H&S are guilty of using the unfortunate circumstances of the item being lost to duck their responsibilities under the distance selling regulations, and while the law may technically be on their side, unbiased consumer opinion almost certainly won't be.
H&S are not losing money here because the item got lost - even if the item reached them it is scrap anyway. They would lose out on postage costs, but they lost that the moment they allowed faulty goods to leave their premises.
The fact that H&S offered £500 and then have withdrawn that offer because the OP had the cheek to consider is other options shows massive distain for their customers.
My advice to H&S would be to come to some arrangement with the OP, otherwise you may find business from new customers drying up.