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Yep, that looks like padding. An oil pan gasket? Unless you asked for it, someone's going for the throat.
Get your paperwork together and speak to the general manager or owner, not the service manager. Stay calm, collected, clear about intentions and mystified at why they would do irrelevant things you didn't request. If they're unresponsive don't be shy about filing in small claims.
As for the BBB, they'll help you understand the shop's history before beginning your resolution attempts, but don't expect much in the way of assistance. The BBB is mostly toothless and can't help unless you bump into the rare honest mistake. Doesn't hurt to add your incident to their count but don't expect the cavalry.
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There are a vast number of people who are uninformed and heavily propagandized, but fundamentally decent. The propaganda that inundates them is effective when unchallenged, but much of it goes only skin deep. If they can be brought to raise questions and apply their decent instincts and basic intelligence, many people quickly escape the confines of the doctrinal system and are willing to do something to help others who are really suffering and oppressed." -Manufacturing Consent: Noam Chomsky and the Media, p. 195
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