I do not believe they can deny you a libro de familia.
You obviously have a Spanish passport - do you also have DNI? If you don't have DNI maybe it might help to apply for that in terms of establishing a greater link with Spain. I can tell you how to do that as the procedure is different to NIE becuase you are not extranjero! If you try and do anything in Spain you will need DNI - without DNI you do not exist!
I once had three and that really surprised them - I had one for each child! I think they since took them all back and merged them into one and blamed me for the error!
Sometimes you can play games with the Spanish officials and use their interpretation of laws to your advantage. I have on occassion said fine show me where that is written - show me the law - and they can't - but I still get shown the door.
A Spanish magistrate did help me in the past change my son's name as he was born under franco law which meant he had to take a name from the book of names. In the free world it made no difference but in Spain it would have been a real problem in school & university to use a different name. All we had to do was bring 2 witnesses to swear he was always known by a different name and then they re-issued all his paperwork (DNI, passport etc) - it only took a couple of weeks.
I also had to have a lot of my wife's paperwork re-issued because names on driving licence and bank cards etc did not tally with Spanish ID. Try explain to a trafico why your driving licence has a different name! But there again you have an advantage - a different identity.
Most people don't know what the old Spain was like and the fear people lived under and had to do what the governemnt told them or face imprisonment which I think partly explains why people still will not challenge the system. Franco still lives in all the public offices and the older generation still live in fear. Maybe this is one of the reasons you or your family escaped to the free world.
Try your local MP or MEP - worth a letter or a petition!!