2007 Nissan 350Z Running engine with no oil

My future son-in-law took his 2007 Nissan 350Z to the dealer for an oil change. When he got home (after driving about 50 miles) it was making a strange noise. He checked the oil and there was none on the dipstick. I had him start it in the driveway and the oil pressure came up to normal, then right away went to zero. He had it towed to the dealer and watched as they drained about one quart out of the crankcase. The dealer checked the oil for metal shavings and said there were none. They filled it with oil, test drove it and said the engine was OK. They said the noise was the "timing chain sensor losing pressure". I think this must have caused some engine damage. I don't understand how the engine didn't seize (unless the oil pump was able to intermittantly suck up some residual oil). What do you think? He needs to decide whether to accept what the dealer says, or play hardball and demand a new engine. Thanks.