On the downgrading, the situation is black and white and
boyda81 is right and BD wrong: either BD put you in the same (or higher) cabin, in which case you are not entitled to reimbursement, or they put you in a lower cabin, in which case the provisions of Art 9 kick in. No 'ifs' or 'buts'. This is a strict liability. Even if the cabin was unique to a plane and that plane ceased existing, you would still be entitled to the partial reimbursement. Premium economy on long-haul is a distinct cabin from economy: it is a distinct part of the plane, with different seating and you pay the standard (i.e. higher) rate of tax ex-UK. Economy is undisputably a lower class of travel. Therefore you are undisputably entitled to reimbursement under the terms of Art 9 (unless, of course, you were offered the option to travel in premium economy and declined).
If you still do not get any joy with BD over the phone, write to them, and if you are not getting anywhere, you may want to get in touch with the Air Transport User Council, which is responsible for overseeing enforcement of the reg in the UK. Their address is:
Air Transport Users Council
Room K705 -- CAA House
45-59 Kingsway
UK - LONDON WC2B 6TE
Tel. : +44 20 7240 6061
Fax : +44 20 7240 7071
web:
www.auc.org.uk
On the compensation for cancellation issue, this is less straightforward. While some would argue that tech delays do not normally constitute an "extraordinary circumstance" absolving the airline of its responsibility to compensate, this is a matter of interpretation of the regulation, which is not clearcut. Airlines themselves have taken the view that only cancellations for commercial reasons are covered. While this is a dubious interpretation, you would probably have to fight it in the courts, with an uncertain result.