Peterg, that's a huge amount of oil for the engine to burn in 40 miles and continue running properly. Are you sure you haven't got an oil leak? It's possible for an engine to leak little or no oil when ticking over, but leak quite a bit under load when the oil pressure is higher, although even then, a pint every 40 miles is still a lot!
Have you driven it several times and each time experienced the same loss of oil?
As for replacing the pistons, £6400 seems very expensive. How many hours labour are included for £4000?
I think you need to do some proper diagnosis before getting too gloomy. As Stefan says, a compression test is essential and while you're at it you can check the state of the plugs. If it's really burning that much oil I would expect the plugs will be heavily oil fouled, to the point where the engine is missing and probably becoming hard to start.
Never had an engine "rebuild" where they leave the pistons in place, I hope you didn't pay much for it!
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