Goblin blood on my garage floor

[tom4bren]

... they claim the water pump cannot be at fault as fluids don't usually travel up.

Kindly remind them that the fluid is under pressure and can in fact be forced upward.

Also the water pump is inside/behind the timing belt cover, thus more difficult to get to and they cannot justify that work under warranty.

There's the real story ... more work. It's not their perrogative to 'justify' work required to honor a warranty. Let 'em try their fix first but make sure that you are satisfied that the repair is complete before you sign the receipt.