Without teaching granny to such eggs, I'd be mentioning the Sale of Goods Act and items "not of mercantileable quality" about now. KTM are correct, your contract is with the dealer. Make a time line of events such as:
1/9/06 Purchased bike ABC 123 X from KTM-Leeds
14/10/06 Service by KTM-Leeds at 600 miles
15/10/06 Service bulletin 12345 from KTM UK
13/4/07 Service by KTM-Leeds at 6000 miles
1/4/08 Failute of alternator etc.
Get it on paper and send it recorded delivery. Point out that you are being deprived of the use of your bike due to their poor quality work and inaction and are seeking advice. You have a right to expect workd to be carried out to KTM's standards and in line with their service bulletins so long as you present it at their stated intervals. This is not common wear, you have an expectation that an alternator wil last over 5 years. The aim is to get them to think it's possible you'll be getting a lawyer (or have). It's amazing how fast they can cave in and stop playing ping pong with KTM once they know you know.
Andy
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