I might be able to help here.
Check your paperwork and see if there is any evidence that the seller provided a warranty of any kind.
Specifically, there should be a Federal Buyers Guide that came with the car and that you signed. Does it indicate a warranty of any kind?
If so, that is enforceable.
If not, you are likely screwed, esp if you signed a document that indicates the car is sold "as-is."
How is it that the warranty company has establised that the car was sold with a bad RMS? Did they do an inspection and note that as preexisting?