Al, sad story indeed! But these things can happen from time to time. Do you mind giving more info on the oil leak, for the rest of us to benefit?
My understanding is that the oil pump picks up oil directly from the sump (provided the pump isn't dry and lost its prime) and then pushes it through the spin on oil filter if equipped, then through the engine passageways before dumping back into the sump internally. There are a few places on the case or accessory section where it may be tapped off for the governer/prop, oil pressure sensor, and turbocharger system including pressure controller, wastegate and turbo bearings. If the source of the leak happens to be near the end of the oil path, the flow of oil through the system and out the leak easily might have been enough to protect an idling engine from any damage. I believe I have heard that during certification, these engines have to still be making oil pressure with as little as two quarts in the sump. Not sure if that's accurate or a rumor. I wonder if that one quart left meant that the oil pump hadn't had enough time to keep pumping that down to zero through the leak, or if the oil strainer pickup in the sump had been pulling air for awhile, leaving that quart untouched at the bottom.
Your partner incorrectly assumed that the presence of oil in the sump meant that the low oil pressure was related to a bad gauge. But I have seen Continental engines lose their prime after sitting for months, meaning no oil flows, or they can develop a major leak such as you had. I always try and look at the oil pressure the moment I've stabilized the RPM after every start for this very reason. As an aside, if you know that your aircraft has its hourmeter powered by an oil pressure switch, you might be able to detect a bad oil pressure gauge by verifying the hourmeter is working even if the pressure gauge is zero. I still wouldn't fly it like that, but it helps the troubleshooting.
Anyway, curious to hear the source of such a major leak. Is this something covered by your insurance?