Peugeot 206 1.4 lx oil indicator flashing

I have had my 52 reg peugeot 206 1.4 lx for nearly a year now and this is the second time my oil indicstor light has started flashing. The first time i took it to the main dealer and they told me it needed a ecu update or sumthin. During the update they managed to blow up my ecu and i ended up with a crap courtesy car for a week while they corrected THEIR FAULT. While basically the problem is back and in my manual it says not to drive the car because i have a problem with my oil level gauge. I have checked the oil and it is fine and the car still runs ok with no problems its just the fact that this light is flashing. I must admit i am a bit worried about the fact that "it could seriously damage my engine" (so the manual says) but i just believe that it is a common fault as they didnt seem at all concerened the first time it happened. i know if i take it to the dealers they will charge me loads of money to fix it and it will probably just happen again in a nother 6 months. Basically i wud just like any advice on wot i shud do in this situation as i am continuing to drive it as i need to i have no choice. Also just wondering if anyone else has this problem and shud i just get rid and get a half decent car instead.
Thanx in advance