These are always tricky cases to deal with.
The first thing to say is that if your phone was returned to you in a worse state than when it left you, Virgin Medias is liable to rectify the matter, even if the damage was caused in transit. Under the terms of current consumer legislation, a supplier is responsible for goods, right up to the point of delivery.
Unfortunately, it is notoriously difficult to contest a 'user abuse' allegation by a supplier, especially when - as in this case - the user admits to having caused some damage.
You might try contacting Virgin Media to tell them that you have consulted us, and see if you can get them to put right the damage that occurred whilst the phone was with them, or when it was being returned to you. Try not to be confrontational, but be firm - you have a right to expect the phone back in the same condition as when you sent it.
If you are going to stay with Virgin Media, and your contract is nearly due for renewal they might offer you a better deal on a new phone if you renew.