My car is screwed up after brake light switch was “”fixed”" for recall.

I have a 2002 Volkwagen Beetle TDI 1.9L.
I purchased this car used 1.5 months ago. We had a fantastic mechanic look at it before we bought it, and he determined that the car was in excellent shape. The dealer had the car for a couple of months before selling it, and it had no problems other than that the CO2 sensor needed replacing. We did that 2 weeks ago, at which time another mechanic looked at the car and said it was in wonderful condition.
The past owner saved the recall notices for the brake light switch, so I scheduled an appointment at Herzog-Meier today to get the switch replaced.
I got to the dealer (with my 18 month old son in tow) and they told me it would take a 1/2 hour to replace the switch. It did. Then I got in the car and drove it away.
As I was driving up the road, I noticed that the brake pedal had something unusual about it. At first, I got really scared and started to think that my brakes weren’t working at all. The brake pedal felt a little bit tight, and when I would press it slightly, nothing would happen. However, when I applied a significant amount of pressure to the brake pedal, my car stopped abruptly. Something was really wrong.
So, I started driving again and at about 25mph I shifted into 3rd gear. My car started lugging badly and then I reached a slight incline in the road. All of a sudden my car started decelerating. I pressed the gas pedal, but nothing happened. I shifted back into 2nd gear and the engine revved up and began accelerating again.
Obviously something was wrong, and I felt positive that it had everything to do with the service that I had just recieved on my car. I turned around to drive it back to the dealer, but I had to keep my car in 2nd gear, as none of the other gears were working. After a few minutes, smoke started wafting out of the left-front side of the car. I was really unsure as to what was going on and didn’t know if I should keep driving. It felt as if the emergency brake was on, but it wasn’t. It smelled like burning rubber. I was really scared to have my baby in the car with me.
All of a sudden, about 3 blocks away from the dealer, there was a loud “”POP!”" and my car lurched forward uncontrollably. Immediately afterward, I felt some sort of ‘release’ in the brake pedal. I pulled the car over. Even though smoke was still coming out of my car, it seemed like no more was being produced and so I merged back in with traffic. The brake pedal felt like it was back to normal, so I tried to shift the car into 3rd gear. It worked. Everything seemed fine. Even so, I pulled into the dealer and told them what happened.
The mechanic told me that it could be that the new brake light switch was faulty, or that it had been installed incorrectly. He said that the smoke was definitely not from my clutch and so he could only assume that it was from the brakes. We both agreed that this must have to do with the service I had on the car, since there were no problems before I had the brake light switch “”repaired.”"
The mechanic installed a new brake light switch and drove the car in a small circle, telling me that everything looked fine. I then got in the car and began my 20 mile drive home. I drove a couple of miles until I got to the freeway and once I merged in, I cautiously put the car into 5th gear. Everything seemed very fine.
After a few miles, I got off the freeway and began driving through downtown. I made it to within 3 miles of my house before more problems started. At this time, I would downshift, and as soon as I had the clutch pressed down and took the car out of gear, my car would lurch forward as if I were pressing on the brakes really hard. As soon as the car went back into gear, it would begin moving forward again…but it seemed stalled. Once again, it felt as if the parking brake were on. I tried putting my car in neutral and coasting to a stoplight. My car would not coast. It would stop as soon as I took it out of gear.
I still kept heading for home, and within a mile of my house the same problem started to happen with 3rd gear. My car would start lugging at 20 miles an hour in 3rd, and then at 30 mph in 3rd. I tried shifting into 4th gear to check that it wasn’t the gears, and 4th did the same thing. I had to finish my drive home in 2nd gear and when I made the turn to my house, the car stalled out. So, I barely got it parked in front of the house.
I called the dealership and they are sending a tow truck to get my car tomorrow so they can check it out. I called Volkswagen and reported what happened so that I could try and figure out if it was a problem at the dealer or a problem with the switch. The woman I spoke to on the phone said that she couldn’t get me any information but that they would call the dealer tomorrow and then call me back.
I am very upset and saddened that I took my car in for a simple procedure that resulted in this. I feel like my son, and myself were put in a really dangerous situation…far more dangerous than if the brake lights had quit working. My car was stalling out and refused to coast on streets posted at 50mph.