Steering Failed problems of the 2006 Toyota Prius

I was driving on interstate highway 5 north to los angeles late evening around 9:00pm. The steering column began making a grinding noise and vibrating. Each time I turned the steering wheel either to the left or to the right the car made a vibration and grinding noise and felt stiff. The jarring was felt in the acceleration pad and in the brake pads each time I either accelerated or braked. I took the car to the dealer where I service my car on July 5th 2014. The service department was able to duplicate the exact complaint I had. The service department gave me an invoice informing me that the charges to fix the steering column and the electric motor inside would cost me over $2000. 00. I called Toyota on 14th July to ask if they would take care of this issue. I was informed by Toyota on July 18th, that they would not cover this because it was out of warranty, and the car had 148,000 miles, and the recall work had been done in 2012 on this vehicle. As a peace offering they said they could give me 700$ to fix it or buy a new vehicle. The dealer, where I went to get the problem resolved, said they could not do anything because this was a different issue from the recall???? I now have a vehicle that is not safe to drive which I am being told is not covered by the company. I have never heard of a steering column failing. I was not aware that my vehicle even had a recall. I had no intimation from anyone. And no I did not realize that in late 2012 the dealer had done some work on the recall. What is there to show that the work was done correctly and that this is a common failure problem in all vehicles?? I have had vehicles that I have used for over 200,000 miles with no mishaps including a SAAB and an Acura.

1) steering wheel/shaft appears to be improperly supported; feels loose when turning lock to lock since new. Have brought to the attention of four (4) Toyota dealers when service performed (have taken to Toyota for all service work since new), all have advised that there is "nothing wrong" with the vehicle. It is the only vehicle we have ever owned that has this sense of disconnect and potential for a much more serious issue were there ever a steering failure. 2) over rough roads (when vehicle was driven in seattle and bellevue, wa) when stopping, the abs system seems to activate prematurely and increase stopping distances. We have other vehicles with abs brakes which do not activate so readily and stop so slowly. As it relates to incident date(s): since new, vehicle purchased November 2005.