Hi corporate-wage-slave,
Thanks for the advice on this back in July! Just posting the outcome here in case others have similar claims outstanding.
BA emailed me today agreeing to pay the £475 of expenses in full. They are not going to refund the baggage fee but they've issued 10,000 avios compensation for this. I feel this is a good outcome and I am pleased this is resolved.
So the processing time on this was just short of two months.
It seems like BA and HAL are slowly getting their act back together. LHR has been a much more calm and pleasant experience recently.