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You need to talk to a lawyer asap. Dealership is obviously going to play dumb, regardless if they knew or not (my guess is they did). The issue is if the laws in your state allow you to win a litigation on the grounds they should have known. If you win, dealer might go after previous owner, which probably is the real 'criminal' here, for not disclosing the damage (I always do, as minor as it might be), but that's not your problem.
You'd also need an expert assessment of the repairs done to your car. And finally if your contract doesn't say anything about dealer guaranteeing car doesn't have damage, you might have a hard time winning. So the lesson for everybody reading this is to always add that language to the contract so we have a sure way to win a lawsuit if somebody can prove previous damage to the car, which shouldn't be hard in your case. Good luck.
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