UPDATE AGAIN
Spoke to the Dealer service manager, told them I was disgusted with their lack of diagnosis and the service manager actually agreed. The service manager said the technician who claimed I needed an engine replacement basically did nothing to diagnose the issue, just looked at mileage and oil loss and equated that to bad piston /oil rings which explains why they only spent an hour or less actually "diagnosing" the problem.
The service manager brought up all the other issues that can plague this model year, like the valve cover and the TSB with the oil consumption warnings, AFM issues, etc.. Offered to personally send a loaner vehicle over, pickup our Tahoe, and properly diagnose the problem.
I already bought a replacement valve cover to do the job myself and bought an AFM disabler.
Should I give the dealer another shot or fix the issues myself? If I send it back, they'll doubtless charge hundreds or more for the various fixes for labor.
The truck has run fantastic since replacing the lost oil. Not a hint of smoking, runs just fine. I'm inclined to install the valve cover, disable the AFM, run some engine cleaner through, and then watch the oil now fully aware of the issue.