What you do now is entirely up to you. You can walk away or you can go the whole way and open an action in the Small Claims Court.
Did you try Consumer Direct?
What I would strongly urge you to do is to formally write to the retailer stating that you believe that they either didn't test the drive or that the test was carried out incompetently. As a result of that the results of their testing were incorrect and the drive was faulty. The evidence that you have of this is that the drive did not work previously and the manufacturer replaced it for you. The replacement drive works - QED, their test was wrong. As a result, you do not feel you should have to pay the test fee.
You should also make them aware that such testing charges are almost certainly illegal.
State that if they do not refund the test fee by a certain date (say the 31st of December) you will open an action in the Small Claims Court. Be aware that this is not actually free, and although your financial exposure is limited, you are potentially open to pay part of the retailers costs if they win.
The Small Claims System requires you to have exhausted all possible other routes to resolve the problem and that's basically what the letter is - it's an ultimatum to ask them to sort this or else!
Make sure you keep printouts of everything they have sent you in webnotes and make notes of any telephone calls you have made.
My gut feel is that they would lose as they can't prove they tested the drive any more than you can absolutely prove it was defective. The nub of the issue is whether the person adjudicating over the case holds the testing charge to be illegal. If they do then you win automatically. If they don't (and they should) then you may have to argue that they didn't test the drive. The fact that they have no test certificate and have failed to provide proof it was tested should be adequate to win you the case. Even if they subsequently do provide proof, they should have provided it when you asked for it, and that should also lose them the case.
Remember that the retailers terms and conditions DO NOT take precedence over your legal rights. They just can't.
http://www.adviceguide.org.uk/index/your_rights/legal_system/small_claims.htm explains the process.
http://www.aboutsmallclaims.co.uk is a good general site that warnms about a few potential pitfalls to the small claims process.