Operator believes I should forfeit the 50% paid as it was my decision to abort and they had turned down other bookings over the period
You decided to abort as you discovery that the aircraft went U/S. Returning an aircraft which you are unwilling to fly due to U/S is the only thing to do. Tell them that they are lucky that you returned it to home base! Other bookings? The aircraft would have been unserviceable for them too.
A fully functioning seat belt is your last protection when everything else has gone wrong. What compensation would you take to
not have that effective protection available? Tell the rental outfit that by returning the aircraft right away, you reduced their legal exposure to a lawsuit for injuries you sustained in their aircraft, which became U/S.
A "proper" rental agency would not stick you with costs beyond the operation of the aircraft, when you returned it upon discovery of what anyone would agree is a safety deficiency.
For years now, I have refused to fly in aircraft which do not have shoulder harnesses. The facts are overwhelming that their effective use prevents injuries. National authorities and aircraft manufacturers are busy making shoulder belts mandatory, so their is no argument to be raised to not require their use.